Revenue seen at Rs 300cr post expansion: Shiva Cement

Rourkela based Shiva Cement received environment clearance from Ministry of Forest & Environment (MoEF) for expanding plant capacity from 0.132 MTPA to 1.05 MTPA.

RP Gupta, CMD, Shiva Cement in an interview with CNBC-TV18 said post the expansion the plant capacity will be1 MTPA and the project cost is Rs 250 crore. The company expects to fetch revenues worth Rs 300 crore against its current revenue of Rs 55 crore.
Below is the verbatim transcript of his interview with Sonia Shenoy and Ekta Batra of CNBC-TV18. Also watch the accompanying video. Q: Has this nod come through, because we hear this is source based information, but have you got this nod and what does it do in terms of your capacity as well? A: We have already received a MOEF clearance for phase-I expansion from 0.13 to 1 MTPA. In the month of April we had entered into a memorandum of understanding (MOU) with the government of Orissa to expand the plant upto 2.6 MTPA  in two phases. Now we are implementing the phase-I. Q: How much are you putting in in terms of capacity into phase-I how much investment and how exactly are you funding this? A: The plant capacity will become 1 MTPA and the project cost is nearly Rs 250 crore. Q: And where are you getting these funds from? A: We had already applied to the IDBI Bank. Earlier we made an application for 0.6 million for which the loan was already sanctioned. Now we have revised the application for revision of the project size. We expect the same to be sanctioned that by another two months. Q: So, once this capacity comes on street, how will it help you in terms of your revenues and your profitability, because Shiva cement has been reeling under profitability pressure, not just you of course, a lot of your peers have been reeling under issues of the demand-supply mismatch, the capacity glut in the cement industry etc, how will this really help you in terms of your profitability? A: The present over supply situation is very temporary and the enhanced production of this capacity is likely to come in March/April 2013. If you see all the reports, by the time the demand and supply mismatch is already over, cement is rather expected to enter in a bull run. Also Read: CRISIL assigns valuation grade of 5/5 to Sagar Cements Q: Any indication of the revenue bump up that you are expecting in percentage terms? A: Yes, definitely, our present revenue is hardly some Rs 55-60 crore and after expansion it will be at exceeding Rs300 crore. And EBITDA will be multiplied by nearly 10 times. Q: This is the fiscal that you are telling me for the full year you are expecting a jump up from Rs 55-60 crore to Rs 300 crore? A: Yes, after expansion. Q: And this expansion will come on stream in FY13? A: By the end of FY13. Q: Anything pending in terms of environmental clearance or is this it? A: This was only pending, land has  already been acquired. Other approvals have been also received, but we were only waiting for this MOEF clearance. Q: You were mentioning something about your increase in EBITDA as well, how much are your margins currently and how much will they grow by? A: Presently, the margin in terms of EBITDA is Rs 10-11 crore, but after an expansion for a full year operation, it will be exceeding Rs100 crore.