See FY12 sales at around Rs 1750-2000cr: Atul Ltd

The Lalbhai Group has been steadily increasing its shareholding in Atul Ltd. In an interview with CNBC-TV18, Sunil S Lalbhai, MD and CEO of Atul Ltd said, the promoters have been increasing the stake quite substantially over the last many years.

He sees FY12 sales at around Rs 1,750-2,000 crore and FY13 sales at around Rs 2,000-2,500 crore. Below is the transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video. Q: What is the plan with Atul Limited? A: When my grandfather started the company in 1947, promoter shareholding was about 12%. Since then we have been increasing our shareholding steadily as per the creeping acquisition norms. Q: Is there a particular level that the promoters would like to bring their stake up to? Are you comfortable at just sub-50% or would you like to hike it further? A: We are continuously increasing our shareholding for the last many years. We hope we will continue to do as much as possible. Q: You are sitting on quite a bit of real estate we believe across the NH8, any plans of unlocking value through that real estate for your shareholders? A: I had mentioned it last time as well that at this time we do not have plans to dispose off the real estate. Atul has about 1,300 acres of land. We have some other real estate in Gujarat as well as some property in New Delhi. We do not have plans to dispose off the real estate, in fact we will require for our growth in business. Q: Even if you are not looking for an outright sale though, any plans to monetise that particular asset and generate some value for both your stockholders and yourself within Atul? A: No, as of now we do not have any such plans. We have an investment committee, when we have a large project, we may dispose off some assets if required. But basically we are trying to see if we can generate adequate cash from operations itself for our growth. Q: What is the focus of Atul going forward? Is it still on life science chemicals? Would you continue to hold the investments that you do in companies like Wyeth and Novartis or is there any plan to divest some of those stakes and use the money in core operations and to grow the businesses? A: As of now, we are implementing capex worth about Rs 150 crore. Last year, we invested about Rs 80 crore. This year we have already started investing about Rs 50 crore. We do not require to dispose off any assets to implement these projects which we have in mind. Q: You finished last year though with revenues just under Rs 1,600 crore. If you are going through such a big phase of capex, what is it that you think you may deliver in terms of revenues for the current year? A: Current year, we are expecting sales of between Rs 1,750 and 2,000 crore. We have started debottlenecking and expanding some of our capacities. I believe with this capex, which are going on, we will add roughly about Rs 500 crore at full capacity. We believe therefore that it will be possible to achieve turnover of between Rs 2,000-2,500 crore, not in this fiscal, but hopefully in the fiscal after this.