Real-time Stock quotes, portfolio, LIVE TV and more.
Aug 16, 2012, 06.15 PM IST
Hindustan Copper which reported its June earnings recently is expecting good growth in its topline in the ensuing quarters. In an interview to CNBC-TV18, the company’s chairman and managing director,
Ahmed also said that he expects ore grade to improve from September. "Our two projects are under consideration for environmental clearance," said Ahmed.
The company has reported 21%, year-on-year rise in its net profit to Rs 48 crore but its sales grew 16% to Rs 313 crore.
Here is the edited transcript of the interview on CNBC-TV18.
Q: You are doing reasonably well in terms of sales with income growing about 16-17%. Do you think you will be able to maintain that kind of growth in the next 3 quarters?
A: Certainly, and we should be doing better than that. But our profit has still dipped for reasons not entirely in our control. Although ore production was comparable to previous year, the grade has fallen and there is some extra expenditure also booked in this quarter on account of high repair charges and wages. But overall, we should not read so much on quarter-to-quarter performance. We are expecting that the growth momentum will be maintained.
Q: Although the top line was good, you did have pressures which showed both at the EBITDA level as well as in your net level. You said your revenue may be better than 16%. What might the year yield - would it be 20%? What do you mean when you say that some of the pressures were one off? How would you do it in terms of EBITDA margins on an average for the year?
A: In the first quarter, our Ghatsila plant had a breakdown and for almost 44 days this plant was under shutdown. This resulted in higher repair charges and higher tolling charges on that account.
So we are hopeful that the plant is now working; we are hopeful that in the remaining quarters, we will catch up as far as this aspect is concerned. From September onwards, our ore grade should improve significantly and that will improve our MIC production. So we are hopeful that the growth will be maintained.
Q: What about the eight new mining projects that you have? Would you expect all of them to start production?
A: Out of 8 projects, we have awarded tender for six and the work is at the front stage. Out of these six projects, we are hoping to get environmental clearance for two projects shortly.
For example, our flagship projects in Malanjkhand where we expect the environmental clearance by the end of this month, the presentation before ministry of environment has been fixed. So they are at different stages but they will not be commissioned in a short period of time. They will take 3-5 years before they start impacting our top line and bottomline.
Q: You spoke about wage costs; you have actually been able to trim your work force. Should we work with 25% margins for the full year or should we work with 30% EBITDA margins for the year?
A: Even in the worst scenario of last quarter, our EBITDA margin is at 30%. We will certainly do better than this in the third and fourth quarter. I see some pressure in the second quarter as well but it should not be worse than 30%.
Q: Going by the government's stated policy that they will want to increase the public share holding at a minimum to 75%, you are a prime candidate for divestment. Has the government spoken to you in this regard?
A: There is no fresh development but we are expecting the disinvestment to take place in the next three months.
Q: Have you been told to that effect?
A: Yes, we have been given an idea.
Tags: Hindustan Copper which reported its June earnings recently is expecting good growth in its topline in the ensuing quarters.
Action in Hindustan Copper
May 23 2013, 13:57
- in MARKET OUTLOOK
May 23 2013, 09:33
- in Technicals