Speaking with CNBC-TV18, Naveen Sawhney, CMD of Cords Cable said that there has been an increased demand from railways, hydrocarbons and the power sector and fresh orders worth Rs 100 crore are expected in the fourth quarter of this fiscal.
Developers and manufacturers of instrumentation cable, Cords Cable Ltd has witnessed a 100 percent rally in its stock, year-to-date in 2015.
Speaking to CNBC-TV18, Naveen Sawhney, CMD of Cords Cable said that there has been an increased demand from railways, hydrocarbons and the power sector and fresh orders worth Rs 100 crore are expected in the fourth quarter of the current fiscal fiscal.
The current orderbook of the company stands at Rs 100 crore and Cords expects a revenue growth of 20 percent in FY16, Sawhney said.
Below is the transcript of Naveen Sawhney’s interview with Ekta Batra and Reema Tendulkar on CNBC-TV18.
Ekta: We understand first, that you have a board meet which is coming up on Wednesday which is December 30, where you are going to consider approving increase in authorised share capital as well as other agenda items. What can we expect?
A: That is right. The board meeting is there on December 30, and we will in a position to share with you only after that board meeting. We want to rely less on the borrowed capital and we are seeing a pent up demand as far as our products are concerned, mainly to the railways then hydrocarbons, metro and power sector. We thought that it is better using instead of borrowed money, let us look at the increasing authorised capital. But that, I will be in a position to share once the board meeting is over, that is on December 30.
Ekta: So, you are looking to raise money to fund capital expenditure (Capex).
A: Not Capex, the working capital because there is a pent up demand for almost all our products which we have seen for the last two months. So, borrowed money is definitely costlier, so we want to replace it with the equity infusion with that. So, that I am not in a position to share with you unless I share with my colleagues and that will come back to you once the board meeting is over.
Reema: So, the intent is that you will increase the authorised capital and thereafter, you will go in and raise some equity. Could you give us a sense of what the balance sheet of the company is? You spoke about borrowed capital. What is the current long-term short-term working capital debt of the company, and if any, cash reserves?
A: Debt, my colleague, Mr Gaurav Sawhney will be in a position to share with you he is here, I am transferring the line to him.
Ekta: We just have a couple of more questions to you. If we could just shift the focus, for example, the first half revenue, if we look at your numbers, it was quite flat, you did around Rs 122 crore and compare this to around Rs 123 crore. In fact, your performance on the earnings before interest, taxes, depreciation and amortisation (EBITDA) also was quite flat including your bottomline. So, what led to this flat performance and can we see a pickup in the second half?
A: Definitely, if we go through the historical data, the last two quarters are always better than the first half and especially, the last quarter is better than the first half put together. This is historically, it is like that only and then during this financial year, we are seeing the meltdown in the commodity prices. That has affected topline, but definitely, the third quarter onwards, we are definitely seeing much better demand for the company’s products whether this is railways or power sector or hydrocarbons or metro and even the overseas business also.
Reema: You spoke about the pent up demand. Could you tell us what is the current order book of the company? What has been the fresh order inflows that we have seen in this October-December quarter? Any numbers?
A: Right now, we are having order booking of around Rs 100 crore which should take care of about three to four months requirement and the last quarter also, we are expecting a booking of around another Rs 100 crore. The way, the input of inquiries are already with us. We are quite confident we will be doing about 20 percent better than the last year as far as the topline is concerned.