In an interview to CNBC-TV18 ED Finance Bina Engineer, Sanghi Industries, spoke about the latest happenings in the company and the sectors. She expects cement price to rise in the near term. “We do expect the prices to improve. The volumes have been stable. The infrastructure offtake should improve over the next six months, particularly in the run up to the election. So, we do expect that both volumes and prices should be better during the coming six months,” she said.
Shares of cement manufacturer Sanghi Industries jumped 3 percent intraday on Wednesday on the back of a block deal of around 10 lakh shares on the BSE.
Meanwhile, the total income of the company dipped 2 percent at Rs 209.40 crore and EBITDA margins stood at 11.30 percent in Q2FY14.
Also Read: 2014 belongs to cement, logistics: Prakash Diwan
Below is the edited transcript of Bina Engineer interview on CNBC TV-18
Q: We did see a big block this morning, any idea with regard to the identity of who were the parties involved in this transaction?
A: As a company we would know only once the shares are registered in the respective party’s name.
Q: Can you update us with regards to cement price hike. The last hike that was taken was in the last fortnight and what is the quantum of it?
A: The quantum has been different at various places but the improvement is about Rs 5-10 across the sector.
Q: Rs 5-10 was taken in the last fortnight, in the last one week. Which parts was it taken in?
A: This has been on the western side mainly in Gujarat, Maharashtra and similar areas on the western side.
Q: There are talks of more cement price hikes in the next 10 days, do you foresee that coming?
A: It would also depend on how the demand moves on but apparently the cement prices have been at the bottom during last few months so the price hike is imminent.
Q: Do you think a price hike will likely improve the revenues for the company because in Q2 it was a fairly tepid performance, in fact your revenues degrew as well. For the second half, what could we expect by way of revenue growth for the company?
A: We do expect the prices should improve, the volumes have been stable and infrastructure offtake should improve over the next six months, particularly in the run up to the election. So, we do expect that both the volume and prices should be better during the coming six months.
Q: When you mean better, would it be a growth of about 5-10 percent, will it be more than 10 percent by way of a turnover growth?
A: Generally in any case the July to December period gives about 40 percent of the turnover and January to June would give about 60 percent turnover. So there is an imminent seasonable growth that would take place and add to that the additional volume and price improvement. Therefore, we expect significant growth to come during next six months.
Q: A word with respect to the net debt. Could you price us as where it currently stands at because interest costs continue to be fairly high for the company?
A: We have done substantial debt repayment over the last couple of years and today it stands at a reasonable level of about barely Rs 150 crore outstanding term debt over a million tonne of capacity. So, we are around Rs 500 crore of term debt and we have substantially reduced our interest cost in the last six months, which would now remain stable.
Q: To get that into context; the net debt you said was around Rs 150 crore?
A: Per million tonne of capacity.
Q: So that is a total of around Rs 450 crore -500 crore odd?
A: That’s right.
Q: I am reading a couple of articles, its dated around six months ago, where they were stating that you are looking at incurring some capex around Rs 275 crore for some kind of buying of ships, etc. Are you looking at exports, are you exporting at present, is the capex already in the price?
A: We have been doing substantial amount of export since last about three months. The rupee depreciation and opening up of the market in international water has helped us. So, we have been doing substantial amount of exports. We have also enhanced our domestic dispatches, besides we have also enhanced our PPC production also and in terms of logistics, we have renewed focus on coastal shipping, we have set up two terminals already on the western cost.
We are continuously focusing on setting up new terminals on the western cost and we are also looking at minimal carriers for our costal shipping.
Q: Where are you looking to export this capacity?
A: We have already been exporting to the East African Coast and the Middle East.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
