Stable input prices to boost FY17 revenues by 15%: Time Techno

Time Technoplast did not see substantial revenue growth in FY16 after it sold some of its businesses overseas. However, despite this, volume grew by 10 percent, and may increase another 15 percent in FY17, maintained MD Anil Jain."If the raw material prices remain same, we can see a 15 percent or more revenue growth," he added. He expects company's debt to go reduce drastically and EBITDA to grow to Rs 450 crore from Rs 350 crore by next year. Below is the verbatim transcript of Anil Jain’s interview with Reema Tendulkar & Nigel D'Souza on CNBC-TV18. Nigel: I was just going through your press release and you have been indicating that you are looking at overall volume growth of around 15 percent in the coming fiscal, last year we didn’t get any revenue growth what could that mean in terms of revenues? A: Last year was a special year because we have sold off some business overseas so we had to take a knock at our turnover and also the raw material prices came down which had to be passed on to our customers. So the combined effect of that was that the revenue did not grow. If you look at the volume growth even last year we have grown by about 10 percent. Even in this year this will continue. We are poised to record a growth of about 15 percent in the current year. If the raw material prices remain the same the revenue growth will also be 15 percent otherwise the revenue growth could be more. Reema: You have also guided for the EBITDA growth to continue just reading your investor presentation, what could be the extent of margin gains in FY17? A: We are expecting EBITDA to grow in the next year. We will be somewhere around Rs 450 crore in terms of EBITDA as against Rs 350 that we did last year. Going forward this Rs 450 crore plus the depreciation we will be generating something like Rs 550 crore as the cash for the company which will be used for working capital requirement and the growth. We are poised to invest substantially in our business which will see our business growing in the next year. We are not intending to increase our debts. In fact they will be coming down drastically and eventually that will have an effect on our return on capital employed (ROCE). Broadly, speaking we have set out a target that in 2020-2021 we will be doubling our turnover of the previous year and we will be having an ROCE in excess of 20 percent. Nigel: You said that your EBITDA is likely to go on from around Rs 350 crore to around Rs 450 crore so that is fairly impressive. You were telling us about the raw material cost that is the reason why we did see a bit of a dip on the topline how much of a difference does this entire crude price spike make to you and also the ROCE in the last year you were at around 14 percent and now you are telling us come 2020 you will do more than 20 percent, but in the next fiscal what are you likely to do? A: We should be inching by about 1.5 percent every year and if not more. It should be around 15.5 percent next year and that generally will continue until we reach at least 20 percent. Talking about the raw material in fact what happened was as crude prices came down raw material prices came down substantially. Though we have always maintained that the prices of crude and the prices of polymers have nothing to do with each other as the polymers are been produced based on gas, sometimes they move in a same direction. We find that the crude prices have started going up but the prices of polymers have remained more or less around the same. This is a play of supply and demand. We are very pleased to see that the lot of capacity that have come in middle-east and with the Iran coming into the market they have a huge polymer capacity which is based on gas and they have India as a natural market. So we expect that the prices will remain stable with negative buyers in the next years.