Consolidated growth ex-Phoenix Lamps 18%: Suprajit Engineering

Suprajit Engineering reported a solid set of earnings for the June quarter with revenues rising 64 percent

In an interview to CNBC-TV18, Ajith Rai, CMD of Suprajit Engineering spoke about the results and outlook for the company.

He said consolidated growth excluding Phoenix Lamps stands at 18 percent and standalone growth stands at 20 percent.Below is the verbatim transcript of Ajith Rai’s interview to Anuj Singhal, Sonia Shenoy & Latha Venkatesh on CNBC-TV18.Sonia: You did mention in your press release that these numbers may not be strictly comparable because of the acquisition of Phoenix Lamps that you have made on June 18 last year. But can you tell us what the growth has been for the company on an adjusted basis and in terms of new orders you have been getting a lot of fresh orders from your clients like Mahindra and Mahindra (M&M), Renault etc. How does the order traction look now?A: Yes, we had a strong quarter. If you look at Phoenix itself on their consolidated basis without consolidating that with Suprajit numbers, they have grown at about 24 percent on a consolidated basis with the earnings before interest, taxes, depreciation and amortisation (EBITDA) growing at about almost 100 percent. Whereas in Suprajit on its own consolidation, without Phoenix, has grown at about 18 percent whereas EBITDA has grown at about 30 percent. So, that is the numbers in two separate cells.Now, when you are consolidating it looks like the consolidated sales having grown at 63 percent and profit before tax (PBT) growing at 100 percent that is because about two months of last year sales was not there because we acquired only on June 18. So, that disconnect is there. However, having said that, on a standalone basis itself the growth has been close to 20 percent with a strong EBITDA growth and business we see as going forward also as pretty strong.Latha: So, how would you look at the earnings or revenue and EBITDA for the rest of the year for both Phoenix as well as for Suprajit. Phoenix had gone through a couple of years of what I would call as consolidation and bad time because of certain business having lost but with the new investment that we have made and the management bandwidth that we brought in the last one year some of those leakages in terms of sales have been all plugged. So, that is why you see the first quarter numbers of Phoenix being much stronger.So, we think on a consolidated basis with Phoenix and Suprajit subsidiaries itself -- in fact I must say that our own subsidiaries of Suprajit Automotives and Suprajit Europe had done exceedingly well in the last quarter. So, on the overall picture our continued stand is that we will outbeat the industry growth by about 5-10 percent and continue to have a solid EBITDA margin of 15-16 percent.Anuj: You gained market share in this quarter. You are saying you will go faster than the industry. What kind of market share gains are you factoring in for the next two or three quarters?A: If you look at Indian market, in the two-wheeler segment we are getting a strong market pull from one of our Japanese two-wheeler customer. There has been a strong growth where we had only about 15 percent business about five years ago. Today we are about 40 percent plus which will go to 50 percent. There is a traction there. There are some of these in the automotive space. Customers like Renault, Nissan, M&M some of those new launches have been pretty strong and even Volkswagen is doing pretty well. So, that has also added to our strength and our strength is more coming in the automotive sector in the exports, to Europe particularly to BMW, VW and Renault-Nissan.