Sunil Kanojia, group president of Sintex Industries says the company will focus on conserving cash to meet FCCB redemption needs. The storage tank maker reported profits down 27% for third quarter at Rs 82 crore.
Speaking to CNBC-TV18, Kanojia said, the company has frozen future capex plans for now. "We need to raise nearly USD 100 million debt for FCCB redemption," he said. Despite slow execution of the monolithic business, deteriorating fundamentals in the Eurozone and the FCCB concerns, Sintex shares have participated in the bull run and have gained close to 45%. On a positive note, Kanojia said issues in the monolithic business are "short-term" in nature. Sintex has cash of about Rs 800 crore on its balance sheet, he said adding, "will raise debt of USD 100 million via ECB route." Below is an edited transcript of his interview with Latha Venkatesh and Reema Tendulkar. Also watch the accompanying video. Q: Your Q3 results were primarily impacted by the slowdown that we have seen in the monolithic business. Can you elaborate on the reasons for the slowdown and the outlook for that segment? A: When you look at the results of Q3, they have to be seen in light of two issues that company is confronted with. One is bit of slowness in the business of monolithic in terms of execution, especially since this is government led business. Second, company also has on hand issue with regard to redemption of FCCB. So company took this as an objective to do whatever we have to so that we can redeem the FCCBs if it comes for redemption. The primary objective of the company is to conserve cash as much as possible, so therefore we have frozen future capex at least till that time. Also we have slowed down the execution of monolithic business because that is one business where you have lot of working capital which gets stuck and we noticed that because of slowness in the government business the execution needed to be controlled to avoid any money getting stuck in larger context of the debtors and that became one of the objective. Therefore, Q3 has seen some kind of moderation from both fronts, that is internal which is company controlled as well as external factors where we felt that government wasnDiscover 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!
