Likely to turn profitable by year-end: India Glycols

Green petrochemical company India Glycols is optimistic about the current year and is hoping to turn profitable by this year-end. Speaking to CNBC-TV18, Rakesh Bhartia, CEO of the company said that the company has undertaken a restructuring exercise and estimates a volume growth of 10-15 percent in the first quarter of FY17. India Glycols is planning to start its captive railway terminal in the second quarter of this fiscal year and hopes to streamline its logistics business, Bhartia said. The company is also looking to divest its suspended operations in sugar unit. Below is the verbatim transcript of Rakesh Bhartia’s interview with Mangalam Maloo & Reema Tendulkar on CNBC-TV18.Mangalam: As I read about your company you have taken a restructuring exercise which should start bearing fruits this year. FY16 the loss came in at around Rs 49 crore odd can we expect the company to turn in to the black in FY17? What are the restructuring exercises that you have taken place and as a result of that can we expect it to turn into the black?A: I am fairly optimistic on the profit for the current year for a couple of events. One given the fact that the ethanol prices which is our principle raw material were exorbitantly pegged by the government of India for their blending purposes. We were forced to undertake a thorough review of our product profile and make ourselves more efficient and customer centric. Separately we also had to evaluate our procurement strategy comprehensively for all the principle raw materials which is not only ethanol but also coal etc. So, I am fairly confident one because of a better market outlook and separately because of all the inward looking exercises that we have done to improve our profitability this year should be better than last year. Reema: When you say better than last year could you quantify that perhaps in terms of a revenue growth or volume growth. Let me come back to my colleagues question is there a possibility that the loss will narrow further or maybe you could even turn profitable?A: I am looking to be in the black by the end of this year. Reema: On a standalone basis or will this be on a consolidated basis?A: Principally our operations are consolidated numbers essentially are an extrapolations of a standalone numbers.Reema: You are saying the standalone profit in FY17 the standalone core business will make a profit?A: It should. Mangalam: Coming to your sugar subsidiary you have a sugar subsidiary called Shakumbari Sugar and Allied Industries. We have seen a lot of sugar companies report a turnaround sort of numbers in the fourth quarter itself on account of higher sugar prices. Can you tell us what the operational performance of your subsidiary has been and are they plans of de-merging that subsidiary, hiving it off and paring some debt?A: As far as our sugar subsidiary goes we have suspended operations in that sugar business about a couple of years back. So, while, yes, in the current year sugar business or the sugar industry has reported excellent profitability but sugar for us is noncore. To that extent we would be keen to divest this business and hopefully there would be more opportunities available given the fact that sugar industry has turned around dramatically.