See FY11 profit at Rs 70 cr, PAT at Rs 7-7.5 cr: Refex

“The next three months are the main season for us and the prices of our products have almost gone up by 70% to 80%, therefore, now we are able to pass on that to our customers also,” he adds.

Below is a verbatim transcript of T Anil Jain’s interview with CNBC-TV18’s Soniya Shenoy and Reema Tendulkar. Also watch the accompanying video.

Q: Tell us how does your quarterly performance this time around.

A: This quarter has been very good for us, sales have improved from last year and even the margins become better. We are into manufacturing of refrigerant gasses which are used in air conditioners. We had made a loss of Rs 16 crore last year, not from the business but we had an overseas business acquisition done in 2008 which we sold of last year at a loss of Rs 19.5 crore, and we wrote of the company at losses in books last year. Therefore, per se the business over here has been profit making venture.

Q: What is the outlook like for FY11? You think you could post a profit and what are your expectations?

A: In FY10, we had a 15 month period to extend this one of loss to cover up a little more. In FY11, we are doing a 9 month year, where we will end up with about Rs 70 crore of turnover and a PAT of about Rs 7 crore to Rs 7.5 crore.

Q: Apart from manufacturing gasses which are used in refrigerants, I believe you also have a couple of solar projects. What is the production from there and at what rate are you selling it? What’s the inflow from this?

A: We have a 5 Megawatt project under the NVVN scheme under national solar mission, this project is coming up in Rajasthan. This will generate about 85 lakh units a year. We have signed a PPF with government to buy back this at Rs 71.90 per unit. So this 5 Megawatt alone can generate about Rs 15 crore to Rs 15.5 crore of revenue. The cost of project is about Rs 70 crore to Rs 75 crore which is being funded by debt from one of the bankers and equity from the company itself.

Q: What about the margin front? Where have you seen some slippage? I believe in this quarter gone by it just stood at close to about 9% to 10%, will there be an improvement?

A: The next three months are the main season for us and the prices of our products have almost gone up by 70 to 80% and now we are able to pass on that to our customers also. These next three months are going to be quite good for us. We will do a sales of roughly about Rs 30 to Rs 35 crore and a profit margin of roughly about 12.5-13% after tax.

Q: On the split up in revenue, what will be from your power business and from your refrigerant gasses business in FY11 and FY12? How much of that dynamic will change?

A: FY11-12 we will have revenues from solar. Solar will be at about Rs 15 crore to Rs 15.5 crore of revenue. PAT after interest will be around Rs 10 crore from solar itself from net year onwards and in refrigerant segment we will be doing about Rs 100 crore plus next year and a PAT of about Rs 12 crore to Rs 12.5 crore.

Q: Any plans of increasing your solar production from 5 Megawatts?

A: We have applied for another 50 Megawatts under Rajasthan scheme. We have to wait till March when the new policies are out from Rajasthan.