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Nov 25, 2011, 02.02 PM IST
Amrut S Gada, chairman and managing director of Sezal Architectural Glass joins CNBC-TV18 to talk about the way forward for his company. Sezal glass is planning to go pan-India soon.
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: Will rupee depreciation impact you negatively, especially margins?
A: There will be around 5% increase in the overall production cost because of the dollar increase.
Q: What is the cash on books after your deal with Saint Gobain sometime back, and how is cash utilization now?
A: The total deal size was Rs 686 crore, and out of that, we have paid bank debt of around Rs 550 crore and certain amount is lying with escrow which will come with the clearance of our obligation. By March-end, we are going to realise the full amount.
The pending cash, we are going to utilise for expansion into the value-added glass business, which is our core strength, by going pan-India.
We are targeting around Rs 500 crore investment in the next four years on the value-added glass business, and we will go pan-India to serve India’s requirement of glass and other industry supply.
Q: You had indicated that you have an investment plan of about Rs 500 crore, but you have just got cash only of about Rs 130 crore. Where will the remaining money come in from?
A: It will be debt or combination with equity. As of today it’s not purely defined, but with the first phase, there will be a debt of around Rs 50-60 crore. Later on, with good results in future, we think that the EBITDA margin will increase. We are long-term players in the glass industry and the demand of value-added glass is growing by 35%. So maybe internal accrual and good debt-equity may permit us to go with our investment.
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