See revenues growing by 15-20% in FY17: Skipper

Skipper, one of the leading manufacturers for pipes and fittings, has won orders worth Rs 100 crore.The company has expanded businesses its international business in Congo, Kenya, Ghana and Malaysia, said Sharan Bansal, Director at Skipper.International business now accounts for 30 percent of the total business, he said."We saw order inflows of Rs 1,200 crore in Q4 of FY16 and expect the Q1 and Q2 of FY17 to follow suit," he added.The company has ramped up its capacity to 41,000 tonnes, he added.He expects a growth of 15-20 percent in revenue for FY17.Below is the verbatim transcript of Sharan Bansal's interview to Reema Tendulkar and Nigel D'Souza on CNBC-TV18.Nigel: There is a BSE announcement that says that you are expanding your international network, could you tell us what exactly are you expanding this, what are the total orders that you have bagged and split it up for us, international as well as domestic?A: I am happy to report that the company recently gained entry in a number of key markets in Africa including Congo, Kenya, Ghana, as well as in the southeast Asia in Malaysia. So it is in line with our overall international push. So, although the value of these orders initially is small, it is a good entry point for us in order to build it up from hereon and make the order volumes even larger in the international order space.So certainly, we are bullish not just on the international side but as well as domestic side, which has also been very strong in the recent quarters. Q4 has been very good for us, we saw orders inflow of almost about Rs 1,200 crore mostly from domestic. Q1 and Q2 is also expected to continue on with the momentum.Reema: What percentage of your order book comes in from the international markets and if you could also help us with your current order book and how are the margins in the international business compare with the domestic margins?A: We have started this year with quite a healthy position. We have started with Rs 2,400 crore, which is almost 2x of our FY16 sales. So certainly, as far as order book is concerned, we are in a comfortable position and we have strong revenue visibility to give us 15-20 percent revenue growth for the next two years till FY18.So certainly that is one thing, which we are quite comfortable with. In terms of the break-up between domestic and international, it is broadly 70:30, 70 percent of our order book stands with domestic and 30 percent with international orders.Nigel: Also tell us about your PVC manufacturing plant. I think your capacities have been moving up just around 6 months ago, it was barely 25,000 or thereabouts, now you have upgraded it to around 40,000 as per your BSE announcement in June, what kind of traction are you seeing in that business, how fast are we going to see scaling up over there, what kind of volumes are you targeting from your PVC business?A: PVC is a high growth area for our company. We have commissioned two plants recently, one in Uttar Pradesh (UP) and one in Telangana in Hyderabad. So both of those have ramped up our capacity to 41,000 tonne. Certainly, we see the new plants although they will take some time in start delivering up to full capacity but we see a lot of good traction in the market where we are entering. So we are going to continue on with pushing in the newer markets and ultimately the focus is to make our brand from east centric brand to a Pan India brand. That is the focus which we are working on in the PVC side. There are a lot of strong government irrigational products namely the Pradhan Mantri Krishi Yojana, the integrated irrigation scheme.Nigel: Let get in some numbers, 41,000 tonne is your total capacity, what kind of volumes can you do in FY17 and what kind of capacity utilisation are you targeting? What kind of scaling up are we looking at?A: In our domestic market of eastern India, we are operating at about 100 percent capacity but in our new markets obviously it is lesser. So on a blended basis, we should be somewhere between 60 percent capacity utilisation for FY17.Reema: For all these projects which you are executing will you need any type of funding?A: No, in fact, I am happy to report that on our engineering products business, which is of course bulk of our company's revenue, we achieve a capacity addition and we now have accumulative capacity of 200,000 tonne in this business and we have done it with very little new bank debt. So our long-term bank debt stands at just about Rs 100 crore right now which is very comfortable. So I feel that we have done a good job in doing this capacity ramp up without taking on too much debt and that is what is going to be going forward as well even with the incremental capacity addition, most of it we expect to fund through internal accruals.Nigel: Give us some guidance. FY17 -- what kind of sales growth can you deliver, margins you told us last time around you are looking to improve and going ahead what is the outlook?A: Looking at the order book and looking at the overall industry scenario both in domestic and international, I am sure that 15-20 percent revenue growth is very much on cards commodity prices are stable so they should not have an adverse effect on the topline growth as well but our focus is on the bottomline to maintain the healthy margins, which we have been enjoying in the past and hopefully better them.