In an interview with CNBC-TV18, MD K Ravi discussed the company's state of business and the outlook going forward.
Shares in NCL Industries rose 12.1 percent today. In an interview with CNBC-TV18, MD K Ravi discussed the company's state of business and the outlook going forward.
Below is the transcript of K Ravi’s interview with CNBC-TV18's Mangalam Maloo and Reema Tendulkar.
Mangalam: Could you give us a sense of the Corporate Debt Restructuring (CDR) status of the company. We understand that the company is in a CDR phase and any indications on when the company is likely to come out of it or what is the update on that?
A: As far as CDR is concerned we will be able to come out of CDR by this end March or probably another six months or so. We will continue to have that CDR, that is the present status. Then we are up to date, I mean payments wise we are up to date and bankers are happy.
Reema: So, no more conditions need to be fulfilled by the company in order to get out of this CDR by the end of March?
A: No, I don't think there are any other conditions. The only thing is this minimum two years period that we will be crossing by end March.
Mangalam: So, then with the CDR overhang coming off the company, could you also give us a sense of what the demand outlook n the Southern part of the country is?
A: South, the cement is really doing well compared to the couple of years back what it was. Some demand has picked up for the special cement, that is for railways. They started the railway sleeper units, sleeper manufacturing unites, they have got orders.
So, they have started buying their cement. In fact we are getting such orders. And another development is the particularly in Andhra Pradesh-Telangana area, the red brick is more or less is out. And the cement brick, particularly the fly-ash aerated concrete bricks, they are replacing the red brick. That is another good demand.
In addition to that, Telangana, the activities have started and they are also in the rural sanitation and Swachh Bharat scheme – they have taken up. And that also we are catering to a certain extent.
Reema: So, if the demand is good, could you give us an update on what the company’s capacity utilisation stands at currently in this quarter and is there scope for it to go up?
A: Definitely, there is scope for it to go up. maybe, we are operating at around 70-75 percent capacity now.
Mangalam: So, with the demand going up, also capacity utilisation going up, could you also give us a sense what the realisations of the company would be? What they are currently and what they are likely to be going forward?
A: Going forward is a difficult thing, but currently as you can see, we started doing much better from the last quarter of last year and first quarter was another good year. And this quarter also is presumably going to be good.
Mangalam: Could you quantify that?
A: No, I am sorry, I am travelling and I do not have any figures here with me.
Reema: A question in the company once you have exited the CDR. Say at the beginning of FY17, what will be the balance sheet of company? What will it look like?
A: We will be making a decent profit if it continues, but we do not know. Generally, the second half for any cement industry is good. The demand goes up after Dussehra. That is where the construction activity will be maximum. So, usually, in the South particularly, the second half is always better than the first half.
Reema: So that is about the second half, the demand in the second half of the year looking better compared to the first half. We were actually asking you once the company has exited CDR, say from April, 2016 onwards, then would you have no debt on your books? If yes, what would it be? What would the new borrowing cost look like? How will the balance sheet of the company, what would it be?
A: Debt is going to be there. Somehow for the banks, this was a non-performing asset (NPA) in some bank books. So, that NPA is gone now already, but debt is going to be there, and maybe around Rs 90-100 crore we will be carrying for the next year also. From next year-onwards, that probably we will be clearing next four or five years time.
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First Published on Sep 21, 2015 03:35 pm