In an interview to CNBC-TV18, SK Sivakumar, chief financial officer of Nelcast says, he expects 25% top-line growth in FY12.

According to him, the demand is very good, both from the HCV segment as well as tractor segment. “The demand has picked up very well.”

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.

Q: We understand there is a huge profit on the sale of your Nelcast Energy shares. That is adding to that cash balance that you will be looking to utilise for your Greenfield projects and for paring down debts. Could you break that up for us? Also, could you tell us how much will be utilised for paring down your debt? What kind of plans do you have for it?

A: I would like to start with turnover and demand. The demand is very good, both from the HCV segment as well as tractor segment. The demand has picked up very well.

We may have to expand our current capacity based on the customer projection. So, we are thinking of going for Greenfield project in next one-and-half year’s time. We have some cash balance which we generated through Nelcast Energy Corporation. We will be using that fund.

Almost all debts were closed last year itself. We have only few debts on the books. Balance cash will be used for working projects. In terms of projects costs, right now we are in the initial stages, we have not come to a concrete plan. Maybe by next March, we will be able to tell you the overall project plan and what would be our capital outlay for this project. But right now we will be investing the money in Greenfield project.

Q: We understand that you seem to be diversifying into off-road vehicle such as earth moving equipment etc. Could you take us through what the plans are on that front? How lucrative opportunity would it be?

A: In the current plan itself, in the off-road segment, the castings will be bigger sized. In the current line, we will be able to do that. It fits in our requirements. Also, the Greenfield project, we will be using both for current HCV and tractor segment as well as for the off-road segment.

Since the demand is picking up in the off-road segment, we are focusing more on that. Also, the casting size is bigger in that. So, I would say it’s a kind of different segment, though it’s only casting supply. It is different segment. We expect more growth in that segment in the coming years, so we are focusing on that.

Q: When do you expect to start supplying this and seeing the revenue come in? What kind of revenue are you expecting on this front?

A: We have just supplied the samples, we will start with small quantum. Next financial year, we will start the bulk supplies. In the next 18 months time, material supply atleast 5-10% of the total production will go to that segment.

Q: Currently for your CV Space and your tractor segment, what is the current order book stand at? What could we see in terms of incremental order inflow?

A: The order book position is very good. The demand position from both the segments has picked up well. In the next one-two years time, the demand will be picking up. In terms of revenue growth, we will end up with 25% growth in top-line.

Q: Your exports bussing is a small fraction of your entire business, so any impact that you might have seen on account of rupee depreciation and will that be too negligible?

A: It will be negligible. There is no impact on our business because the export portion is very less.