Trying to be back on the growth path: Praj Industries

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Trying to be back on the growth path: Praj Industries

In an interview to CNBC-TV18, Pramod Chaudhari, chairman, Praj Industries says, the company is trying to be back on the growth path.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Praj Industries See previous management interviews See what other Experts & Brokerages are saying about Praj Industries Praj Industries BSE | NSE 31/05/12 Are Mutual Funds betting on Praj Industries?

Infrastructure company Praj Industries has acquired a 50.20% stake in Neela Systems for Rs. 64 crore.

In an interview to CNBC-TV18, Pramod Chaudhari, chairman, Praj Industries says, Neela System has been growing and became a very attractive target for the company. " It fits in pretty good as far as both the businesses are concerned. We will be always looking for acquisitions which are bringing value on the table because we just don't want to have the top-line for the sake of top-line," he adds.

The company, he says, is trying to be back on the growth path. "After Q2, I think that the worst was over for us which we had last year," he adds.

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Gautam Broker. Also watch the accompanying video.

Q: You have acquired a 50% stake in a company called Neela Systems. Can you take us through what it brings to the table?

A: We signed the agreement on Friday. We were looking for some areas in water and waste water treatment. We are already pretty strong in waste water treatment. We started this activity for more than a year now.

We were looking for a specialised niche area like pure water which is required mainly in food, beverages, pharma, cosmetic. This company Neela System has been growing and became a very attractive target for us. We have acquired more than 50% stake in this company. This adds to our range of fresh water technology and equipment.

Q: Can you share its revenue, sales and EBITDA levels?

A: This is operating in the range of about Rs 90-100 crore. It has a very respectable EBITDA level of around 20%. Ofcourse the results will be shared in details, once we are out with our quarterly results. At the end of the year, it will be available in greater detail. But it's definitely at a niche where it is performing with very attractive numbers.

Q: How is the order book situation looking like?

A: I wish I could share all this information with you, but our Q3 results are due on January 20. We have already entered the silence period. Unfortunately I won't be able to talk to you about operations of Praj Industries as such today.

Neela is definitely one of the major extensions for our businesses. It is also going to help us for cross selling. We are also making specialised equipment for the same sectors- food beverages and pharma sector. So, this fits in pretty good as far as both the businesses are concerned, for water, waste water as well as for specialised equipment for this sector.

Q: Can we expect similar such acquisitions? What's your inorganic growth strategy being driven by?

A: Praj has always been a knowledge based technology driven company. We also got our R&D into health and wellness area and so many activities are going on. So, we will be always looking for acquisitions which are bringing value on the table because we just don't want to have the top-line for the sake of top-line.

Our strategy is to go for niche area where it will be a definitive addition to the bottom-line. We would like to continue on the same principle which we have been doing for all these years.