Indo Asian confident of posting positive results next year

In an interview with CNBC-TV18, PK Ranade, Joint MD of Indo Asian Fusegear spoke about the Q4 numbers of the company.

The company posted a net loss of Rs 51.14 crores vs net profit of Rs 2.85 crores (Y-o-Y). It's revenue stood at Rs 120.61 crore against Rs 230.13 crores (Y-o-Y). He said that the company's operations will be in top gear in the next five-six months. He is confident about reporting positive results next year. Below is the verbatim transcript of Ranade's interview with Latha Venkatesh of CNBC-TV18. Also watch the accompanying video. Q: What have you done by way of revenues and probably losses in Q4? A: The results are not as per expectations, there are some gaps but the gaps are not because of management lapses or inept handing of business. But, because of couple of events which took place last year. Let me clarify those. Last year when we sold the switchgear business to Legrand, as per the contractual agreement our sales, logistics and marketing team which is handling the entire business was transferred lock, stock and barrel for them. Then we had to relocate some of the manufacturing units. And so all the additional cost which is incurred by us which has contributed to the financials of the company were factored into the negotiated price of the sell. Also, in the course of last year, the government suddenly revised the specifications, which were covering the Compact Fluorescent Lamps (CFLs) and all the lighting companies have huge stocks in the market place. Suddendly, when the specifications change, we had no option but to compensate the distributors who were sitting on huge stock of a product and we have to give them some financial benefits. So, that their losses minimize and that is a commitment to the long-term associates, which we have in the market place. We also had to at discounted price give away lot of our stocks which we had within our company as well. Q: You made Rs 530 crore on the sell of that business, if you can tell us what you did with that money? What exactly were the losses you had to compensate because of the change in specifications, a little more detail on how these specifications change and therefore what was the amount you had to set aside for under various heads? A: The company got against the sell of switchgear business Rs 530 crore. We have retired the entire debt which was approximately 150 crore, we have paid taxes which were approximately Rs 80 crore, we have paid 100% dividend to all the investors which was amounted to little bit more than 20 crore. We have also refunded or redeemed the preference shares for which a foreign company is holding in Indo Asian. So, today we have with us about Rs 278-280 crore which is invested in securities and very safe investment. This money is now available to us for investing and expanding our business. The second question you asked was about the CFL stocks. This happened vey suddenly because the industry was not ready. We were time and again appealing to the government that it will be inappropriate to announce the specifications when the whole industry is not prepared with the range complying to the new specifications. But, they were changed. You can appreciate when the product with the old specification is in the market, overnight the sell drops. So, we had to give credit notes to almost all the distributors holding these products. So that their losses are minimized because it is our commitment to them that no stakeholder should lose money. But, we are confident that with again all the plans, which are in place and the new sales, logistics and marketing team which is now in place, we will quickly recover all that has not been recovered earlier. Q: Do you expect to be profitable by next year, if this is a one off, we can understand but next year should be profitable? A: Yes in the next five-six months, we would have been in full stream again with the new projects also going onstream and I am confident that the faith of the shareholders placed in the company will be further fortified. Q: Any plan for Rs 400 crore that you have on your balance sheet after the sell? A: In the lighting business, we have been able to start a new manufacturing line of spirals, which is a much better newer product and belongs to the future so that has gone onstream last month. We have identified power generation as one of our future businesses in the domain of renewable energy. For that also the plans have been made and it has not been ratified by experts and that will also go onstream in the course of the year. Q: When do you get back in black, would it be this quarter or next quarter? A: I would say, let us not expect too much but,  I am sure next year the results will be positive. We will have a very happy group of shareholders in other side of the table. I am very confident about that. Also Read Indo Asian Fusegear to use cash from sale to create energy