Zenith Birla confident of doubling revenues by next year

Below is a verbatim transcript of the interview. Also watch the video.

Q: You have undergone a scheme of arrangement via which your tools business now stands demerged and you are left with pipes. What is the outlook on this and what is the kind of revenue we can expect?

A: Zenith Birla has been now rescheduled. Now we are going to grow in pipe business and the next one year the revenues are going to be doubled. From the adjusting turnover of Rs 500 crore, we are expecting a turnover of Rs 1,000 crore in the next year.

Q: For this doubling, have you all undertaken any capacity expansion plan?

A: Yes, we have undertaken a doubling of the capacity expansion of ERW pipes and also going ahead with the spiral mill which will increase capacity by 70,000 tonne and ERW pipes almost double.

Q: The niggling worry here is that your margins have been quite low, just about 5.5% in FY10. Will there be an improvement over there?

A: There will be an improvement and the capacity is increasing, the fixed cost will come down. To that extent, the margins will also go up.

Q: By how much?

A: It will be up from 5.5% or 7.5% because the commodity business is conversion business to that extent, the margins are going to be low but it will increase from 5.5% to 7.5-8%.