Metallic oxides and plastic additives producer, Pondy Oxides & Chemicals is looking to merge with Lohia Metals Private Limited and its board of directors would meet on March 18 to consider the same.
In an interview with CNBC-TV18, Anil Kumar Bansal, managing director of Pondy Oxide said that its turnover would increase by Rs 100 crore after its merger with Lohia Metals. "We are expecting profit to increase by 50% of existing profit, he added. Below is the verbatim transcript of Bansal's interview with Ekta Batra and Reema Tendulkar of CNBC-TV18. Also watch the accompanying video. Q: You are holding a board meeting tomorrow, you will be considering a merger with Lohia Metals. This is a 51% subsidiary of the company. Once you are done with the merger, what will be the financial impact of the company. Can you tell us the financials of Lohia Metal? A: After the merger our company's turnover will grow by Rs 100 crore for the coming year. At present the capacities of Lohia Metals are not fully utilized as per the license which Pondyoxide will be able to utilize full capacity and this will increase the bottomline of Pondyoxides and Chemicals in 2011-2012. Q: How much would it increase your profits? A: We are expecting profit to increase by 50% of existing profit. Q: Can you just highlight what the merger ratio could also be and what exactly does Lohia Metals do? Where is it seeing so much growth from and how is it possibly going to operationally contribute to your business? A: Lohia Metals Private Limited is having its own customer base and they are refining lead metal and manufacturing lead alloys. This particular business will be taken over by Pondy Oxides and Chemicals and the turnover will get into Pondy Oxides' business. Q: Your margins seem to be a bit under pressure, you recorded margins of around 4.53% versus 8.2% in Q3. Can you tell us what sort of pressures you are working with because your sales have seen a tremendous amount of growth? A: All the metal industries are working under pressure due to volatility of the metal. Volatility of the metal in international market is very high and we basically work on the international markets. Our export turnover itself for the year 2010-2011 is expected to be about Rs 200 crore. Q: What about margins? A: Margins certainly would be what we have declared and we are expecting good margins for Q4.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
