Auto component manufacturing company Motherson Sumi, at its meeting held on June 10, 2015, recommended the issue of bonus shares in the ratio of one bonus share against two existing shares (1:2) subject to the approval of the shareholders.
Speaking to CNBC-TV18, chairman Vivek Chaand Sehgal said the company is capable of achieving its revenue target of USD 18 billion by 2020. Sehgal said the company intends to push 2-3 plants onstream in FY16. The company has recently won orders worth euro 4.4 billion.
Below is the transcript of Vivek Chand Sehgal’s interview with Ekta Batra and Nigel D’Souza on CNBC-TV18. Nigel: Yesterday you announced that big bonus and in fact we just want to focus a lot about your business. You were looking at a revenue target of around USD 18 billion by 2020. How do you expect to get there given that in 2015 it was at around USD 6 billion? A: The kind of target that we have set is a guidance to our shareholders, guidance to our people who are working in the company that this is where we want to be around 2020. It is a five-year plan. This is the fifth five-year plan in our group. When we listed our company in 1993, we were about USD 3 million on the topline. So, every five years we have set our targets on the topline and the bottomline and we have achieved them.
So, what happens is that we sit down with our customers, every unit, every company sits down with the customer and the customer then gives us about three to four years future. Based on that about 60-65 percent is organic growth and the balance is taken as acquisitions because the customer is always asking us to do new acquisitions. So that is how you come to know the number of USD 18 billion.
Ekta: What are the geographies that you are looking at in terms of your inorganic expansion and when can we expect what? A: I wish I could tell you that. It is very difficult for us to predict where, what we are going to do. As you know Motherson Sumi known as a ‘not yet’ company so the car maker can ask us to do anything. If possible it makes sense for both of us, we will go ahead and do it.
Nigel: You have been stating that 17 new plants would be operational in the next two years but for FY16 itself how many plants will be operational, could you tell us capacity utilisation of these new plants and the likes? A: What actually happens is that car makers are coming up with new models and new ramp ups are happening. So, technically we have to be about three to six months ahead of our customer. So, it is very difficult to predict which plant is going to go when, but about two to three plants will be activated this year itself. Ekta: Just leave us with some guidance in terms of your new orders. We do understand that you won some new orders worth around 4.2 billion euro. Where does that stand in terms of execution and what might the pipeline to look at for FY16? A: What we do is we give you a guidance every six months. So, the last guidance that we have given you for six months is a total of about 4.4 billion euro for approximately about Rs 35,000 crore. Before that the pipeline also we had given almost about a 9 billion orders in pipeline. So, they are in various stages and they start fructifying from maybe within the next three to four months. So, it is a difficult process to put everything down.
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