Kamdhenu Ispat plans on expanding dealer network

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Kamdhenu Ispat plans on expanding dealer network

In an interview with CNBC-TV18, Satish Aggarwal, CMD, Kamdhenu Ispat, spoke about the results and his outlook for the company.

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Kamdhenu Ispat came out with their first quarter results for fiscal year 2010. This quarter the company has seen a turnaround in its bottomline and it has managed to deliver a profit of about Rs 1.1 crore versus a loss of nearly about Rs 1 crore for the same period last year.

The company, however, reported net sales at Rs 103 crore as compared to Rs 83 crore YoY while their total expenditure had risen to 17% from Rs 92 crore versus Rs 78 crore YoY.

In an interview with CNBC-TV18, Satish Aggarwal, CMD of Kamdhenu Ispat, spoke about the results and his outlook for the company.

Below is a verbatim transcript. Also watch the accompanying video.

Q: Could you tell us what the drivers have been this quarter for you all?

A: Company is focusing on two verticals, one is steel and the other is paint. During the last quarter in comparison to earlier, the paint sales has increased by 103% and the steel sales are up by more than 10%.

Q: Currently you have got majority of your revenues which come from the Steel side, nearly about 80% and paint contributes just about 25%. Considering that you are seeing more demand coming in from the paint segment, do you have plans to expand?

A: Yes. If you see the results of the earlier years, we have more than 100% growth during the last two years in the paint sector as well as next year also we have plans for more than 100% growth in the paint sector.

Q: Do you have any capital expansion plans?

A: No, we are just improving the existing capacity of the paint unit. We are increasing more and more dealers through the all India network. Right now the company is having more than 8,000 dealers and distribution network in steel and paint. Contribution and market share of the company is improving day by day and right now the company is the sixth largest company of the country.

Q: Could you go through the margin picture. What sort of steel prices are you working with and what sort of input costs are you working with? You're margins this quarter were around 4%. What is your outlook going forward?

A: The margins will be improved in the coming quarters because we are improving the efficiency and the demand is increasing, as well we are increasing the capacity through the franchisee network in the steel sector

Q: Would you be in the black in FY11 completely?

A: I think it's very difficult to say right now.