See double digit growth in near-term: Nitco Tiles

Nitco Tiles December quarter net profit was at Rs 7 crore versus loss of Rs 9 crore. Its net sales were up at Rs 165 crore versus Rs 76 crore.In an interview with CNBC-TV18, Alok Goel, CEO, Nitco Tiles, spoke about the results and his outlook for the company.

Below is a verbatim transcript of his interview with CNBC-TV18`s Latha Venkatesh and Gautam Broker. Also watch the accompanying video. Q: What went right, is demand back in the pre-FY10 stage? Is it that you can do better than that Rs 600 crore revenues that you posted in FY10 now? A: We all know that Indian economy is growing very rapidly and the real estate sector, particularly housing is doing well. So, obviously our fortunes are linked with it and the sales are showing a very positive trend. But one caution that I want to bring here is that let us not compare our numbers with last year, which was not a normal year for us because we had some exceptional situation. I think we will continue to grow up at double digit in near-term. Q: What percentage of your total revenue has come from exports, has that been affected? A: Exports is about 10% of our overall turnover. Q: Is the domestic demand enough or are you also trying to spread yourself geographically? A: As a part of the long-term strategy, we are trying to spread geographically both within the country as well as outside. But I think Indian demand is very good right now. We will continue to, if I may use the word, piggy ride the growth of the industry. Q: What is the contribution of the real estate space to the revenues of Rs 188 crore? A: In this quarter, nothing, because we just inaugurated our first real estate project, Nitco Biz Park, in Thane yesterday. The income from there obviously would reflect in the future quarters. Q: What are you expecting by way of revenues from this division in the current quarter? A: This entire project should give us about Rs 100 crore, out of which nearly 25% of it has been leased out so that should get reflected next quarter onwards. Others, 75%, we are trying to tie up so as and when we are in a position to tie up, it would reflect in future quarters. Q: We understand that you have four projects in progress right now, what kind of revenues are you expecting at the completion of all these four projects? A: At this stage, we have another project in Thane, which is going to be initiated and one at Kanjur Marg. We have a fairly large land bank in Alibaug. I think the announcement about the projects will take place next quarter. Q: What is the total debt of the company? A: We are about Rs 350 crore debt at this point of time. Q: Is there any plan to be able to reduce it? A: The answer is yes because we have taken major capital expenditure both in our Alibaug plant as well as the Silvassa, which is sort of going to be completed in the next one-two quarters. As the revenues starts coming from there, we would be retiring the significant portion of debt in the next financial year. Q: What does debt go down to end FY11 and more importantly FY12, if that is what you are saying? A: At this point of time, I would not be able to give you the exact numbers because this is still being worked out. But I would tend to think we will probably reduce it by about anywhere between 40-50%. Q: Any equity raising exercise in the near-term? A: At this point of time, we are not contemplating.