See Rs 3,000 cr turnover by 2016: Kajaria Ceramics

For Kajaria Ceramics, second half of the year has always been a better period in terms of sales and bottomline. But this year, it will be even better on account of the now stable rupee, says Ashok Kajaria, CMD of the company.

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He says in three years, March 2013 to March 2016, Kajaria is projecting a turnover of almost Rs 3,000 crore plus and for that the company needs capex of approximately Rs 425-450 crore. By the end of March 2016, the company sees a debt profile of almost Rs 300 crore.

Below is the verbatim transcript of Ashok Kajaria's interview on CNBC-TV18

Q: Can you take us through what the second half of the year will throw up for the company because in the quarter gone by the earnings were good, there was 20 percent growth in the topline, bottomline grew by about 18 percent odd but you have been facing a bit of pressure on the margin front. How does the second half of the year stack up for you?

A: Second half is always good but this year it will be even better for two reasons. The quarter gone by, we are announcing the results tomorrow, has been tough because of two reasons; the dollar volatility and the price rise because dollar being at 67-68/USD. Now dollar has stabilised between 61-62/USD and the pressure is off and second half is always better in terms of sales, in terms of bottomline.

Q: Since your numbers are coming out tomorrow let us focus on other pointers with the company, for example fund raising, we do understand that you raised certain amount of funds from WestBridge Crossover Fund recently. Can you take us through what the fund raising requirement for the company would be in the future and how much of equity dilution would you be comfortable with?

A: In three years, March 2013 to March 2016, Kajaria is projecting a turnover of almost Rs 3,000 crore plus and for that we need a capex of approximately Rs 425-450 crore and this fund has been raised partly out of internal accruals and by March 2015 end our debt will almost be the same as March 2013. So, that is the reason why this fund has been raised. It will be for the manufacturing of tiles and sanitary ware only.

Q: When you say your debt will be almost the same in terms of exact figure, what is the estimate, how much do you plan to bring down your debt to?

A: Not exact figure. Our debt in March 2013 was approximately Rs 320 crore. This is a consolidated debt since we have many joint ventures (JVs) now and at the end of March 2016 we are looking at debt profile at almost Rs 300 crore.

Q: What is your capex and what sort of capex are you envisaging based on demand at least for the next one-two years?

A: For three years starting from March-April 2013 to March 2016 we are looking at approximate capex of about Rs 425 crore to Rs 450 crore, out of which Rs 150 crore we have raised through WestBridge and Rs 300 crore will be approximately internal accruals. We are generating enough cash flow to fund that.