High capacity utilisation led to a 70 percent growth for Balaji Amines in FY16, Ram Reddy, the joint MD of the company said. He expects 50 percent growth to be sustainable in FY17.
High capacity utilisation led to a 70 percent growth for Balaji Amines in FY16, said Dr Ram Reddy, joint MD of the company.
Reddy expects 50 percent growth to be sustainable in FY17 and EBITDA at 10 percent.
The new plant will be adding Rs 60-70 crore to the topline and it expects 20-22 percent growth in volumes in FY17, he added.
Balaji Amines' net debt is now at Rs 70 crore.
Company's net sales for Q4 FY16 is Rs 16,646 crore and profit around Rs 2,334 crore.
Below is the verbatim transcript of D Ram Reddy’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Sonia: Your total income has gone up 12 percent and your margins have done phenomenally well at almost 25 percent. What led to these stellar margins and what is the sustainable rate in FY17?
A: This is because of our higher capacity utilisation and we have done almost 20-22 percent growth in volumes when compared to the last year. We have reduced lot of finance cost when you compared to the earlier year. The efficiency of the clients have given us a positive thing, if everything goes well, this year we have done 69-70 percent growth. It will be sustainable about 50 percent should be the same path for the next year.
Latha: How much of your EBITDA growth was because of a fall in raw material?
A: May be 10-15 percent we could retain but rest we will pass it on to the customers.
Latha: In terms of an EBITDA growth what can you guide us for FY17-18 since you spoke about CAPEX as well you will have some operating leverage what is your EBITDA growth forecast and your margin forecast?
A: It will be another 5 to 10 percent less than what we have done this year because one new plant is coming up, as I said earlier this but its not coming in this financial year. For the current year that will be coming with stream which will give Rs 60-70 crore on the topline and which may add on to the something into the bottom line also.
Sonia: You told us that your finance cost were lower so that aided your bottom-line this time what exactly is the debt on the books of the company now?
A: It is about Rs 70 crore is on the term loans.
Sonia: Rs 70 crore is the net debt?
A: Net debt on the long-term loans.
Latha: When this CAPEX comes on stream you will have a little more debt on the books?
A: No, we are doing expansion entirely with our internals accruals. We have not done any expansions in the entire year, this was only small thing we have done. This is done with our internal accruals.
Latha: So, you will be able to pay-off some of the debt in that case?
Sonia: You spoke about a 20 percent growth in your volumes, how much of that came from exports and how much do you expect exports to grow over the next say two years?
A: Export has not done very great. This year it is par with the last year there is nothing increase in the export in this year. However, because of the new products coming in we are looking another 5-10 percent that is overall 25 percent on the total sales we are targeting for the exports.
Latha: At the bottom line you can deliver another 20-25 percent growth
Latha: Is it 25 or 20?
A: 20-22 you can take.
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