Expect FY12 revenue growth of 20-25%: Elecon Engineering

Prashant Amin, Group Director, Elecon Engineering expects the Benzlers-Radicon acquisition to add Rs 120-150 crore to the topline. The company also intends to expand in the international market with this acquisition because these facilities have in US, Sweden and UK

"At present Elecon turnover in the gear industry is less than 10%. So we expect to get a jump in the coming two years from this acquisition," he added. For FY12, the company is expecting to achieve a revenue growth of 20% and 25% for the complete group. Buy Elecon Eng; target of Rs 102: Sushil Finance Below is the verbatim transcript of  Amin's interview with Ekta Batra and Reema Tendulkar of CNBC-TV18. Also watch the accompanying video. Q: We understand that the UK acquisition that you did will be turning profitable this year, could you tell us what is the revenue and profit expectation from this Benzlers-Radicon? A: The Benzlers-Radicon group would add roughly about Rs 120-150 crore to our topline and integration is going very smoothly. We are not just looking at the topline growth that we will get but we are also likely to benefit from it with the expansion into the international market. This is because the facilities that we have acquired has presence in US, Sweden and UK. At present Elecon turnover in the gear industry is less than 10%. So we expect to get a jump in the coming two years from this acquisition. Q: You said you are working US, Sweden and UK via this UK acquisition which you are talking about, can you give us a sense of the business sentiment in these countries currently and basically what sort of demand scenario are you working with? A: We are quite pleasantly and positively surprised with the trend especially in UK and in US. Our subsidiaries that we have acquired have shown a good growth of roughly about 15-20% in spite of general economy in those countries being flat. For us this is a virgin territory so we definitely expect to get everything on the topline from this acquisition but that is mostly on our gear products. Q: What about the bottomline with regards to this UK subsidiary of yours? A: The bottomline regards to this UK is fairly in line with what you would expect in those countries. The EBITDA is in the upwards of 10-12%. So we do not expect to have any negative impact because of that. As a matter of fact, it will only help our present product to get to those markets that we are not reaching as effectively before this acquisition. Q: Could you tell us what is the FY12 expectation with respect to revenue growth there? A: For FY12, we are expecting a revenue growth of anywhere between 20% and 25% for the complete group. We should reach between Rs 1,450 crore and Rs 1,500 crore for Elecon with both the business combined.