Expect 20% revenue growth in FY12: Hanung Toys

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Expect 20% revenue growth in FY12: Hanung Toys

Ashok Kumar Bansal, chairman and managing director of Hanung Toys says the acquisition of Cody Direct Corp will help in dealing with US customers directly,thus, boosting EBITDA margings going forward. For FY2012, he sees minimum 20% revenue growth.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Hanung Toys See previous management interviews See what other Experts & Brokerages are saying about Hanung Toys Hanung Toys BSE | NSE 30/05/12 Are Mutual Funds betting on Hanung Toys?

Ashok Kumar Bansal, chairman and managing director of Hanung Toys says the acquisition of Cody Direct Corp will help in dealing with US customers directly, thus, boosting EBITDA margins going forward. For FY2012, he sees minimum 20% revenue growth.

The soft toy maker and exporter reported sales turnover of Rs 318.09 crore for the quarter ended March 31, 2011 as against Rs 271.52 crore in the previous year. During the same period, the company posted net profit of Rs 32.32 crore versus Rs 33.28 crore, on a year-on-year basis.

Below is the verbatim transcript of his exclusive interview with CNBC TV-18's Reema Tendulkar. Also watch the accompanying video.

Q: During March, your company made an acquisition of Cody Direct Corporation-what will be the financial impact on the revenues for FY-2012? - how much contribution it will make to the operating margins?

A: Earlier, we worked  through most of the US importers, we can now work directly. This will enable to improve EBITDA margins in FY2012-13 as the middle-men profits would come to Hanung. Although, not much is expected on top-line margins front.

Q: Saying the top-line growth will not see much improvement-would you be working with 10-15% sales growth target? what are your targets on the operating margins and revenues?

A: No, I haven't said our growth won't improve. Taking in account last year's numbers, we have made a total turnover of Rs 1122 crore as against Rs 836 crore. We have made a growth of 34% this year. Going ahead, we expect at least 20% growth.

Q: And, what about improvement in margins for this year?

A: Definitely, we will see improvement in margins. The acquisition of Cody as well as high prices will help in providing better margins. 

Q: What is the capex that you have outlined for FY12?

A: For FY12-13, the total capex plan is Rs 720 crore. Partly, we started in 2011 and balance will be done in the next 18 months. This will help us to increase production capacities in weaving, dyeing, painting and made-ups. We are going one step backwards by putting up spinning with one lakh spindles.

Q: Since you have already deferred global depository receipts (GDR) plan-how do you plan to fund this Rs 720 crore of capex because  What is the equity route and debt route that you are looking for? How much by way of debt?

A: We have received a sanction of Rs 550 crore from our bankers. The balance amount was to be bought in by company. Considering last year's numbers, the profits were close to Rs 121 crore and cash including depreciation was between Rs 145 to Rs 150 crore. Partl of this will be utilized out of internal accruals through the capex. As the investment will be in the next 12-18 months, company will have sufficient cash to contribute to capex.

Q: So, no kind of equity raising in the next 6 months?

A: No. We will raise money via share sale only when the market conditions are better to give us good valuations.