Expect 20-25% topline growth in FY16: Man Industries

Value-added products and low material cost aided growth in the second quarter of FY16, says RC Mansukhani, Chairman of Man Industries. The company’s revenue grew 16.3 percent to Rs 321 crore and the earnings before interest, tax, depreciation and amortization (EBITDA) rose 71 percent to Rs 36 crore in the second quarter. Mansukhani says second of the year is traditionally much better than the first half. He expects 20-25 percent topline growth and 40-50 percent bottomline growth for the full year.   The company’s order book stands at Rs 1,200 crore currently, which will improve by the end of FY16, he says. Current order book will be completed in coming six to nine months, he adds.Below is the verbatim transcript of RC Mansukhani’s interview with Anuj Singhal and Ekta Batra on CNBC-TV18.Ekta: There has been an overall improvement which has taken place this quarter for you in terms of the topline and that has come through on the bottomline as well as the margins. What happened and what led to the growth? A: This quarter if you see the last three-four quarters, our EBITDA has improved mostly because of the high value added products we had introduced. Most of the orders right now we are having are value added products, high quality of coating and different kind of coating and high grade of steel we are using for our clients. Anuj: If you could tell us the kind of run rate that you can maintain from hereon? Now the base effect goes up so from hereon what kind of growth rate can we assume? A: We are expecting the same growth will continue in quarters also. The growth we are expecting, the topline in this year around 20-25 percent. Even the quantity volume also increased because of the softening of our raw material prices, which is not reflecting, but the growth in rupee terms as well as the quantity growth will be much more higher compared to last year. The EBITDA margin is increased because of the high value added products as well as the softening of the raw material also helped in some extent. Ekta: Can you tell us what your outstanding order book is currently?A: The outstanding order book is around Rs 1,200 crore which we have to complete between six and nine months as well as our bid position worldwide approximately is roughly Rs 9,000-10,000 crore which is under process and likely to complete in few months. It is a regular procedure in the company. Ekta: Say by the end of this fiscal where do you think your order book or your order book under execution would go from this Rs 1,200 crore say by the end of March? A: This total Rs 1,200 crore, which will be going to complete in nine months in any case. So, proportionately we will go in this current fiscal also and the rest will be carry forward as well as some new orders we are negotiating that will also help building up the order book position.Ekta: What is the incremental order inflow that we could expect in the second half?A: Normally the second half is always better than first half in our company traditionally but some orders are under execution, some bid are under evaluation so difficult to comment but our bid around Rs 9,000-10,000 crore which we are under process and we are likely to get our reasonable share from that portion. Anuj: Your finance cost went up quite a bit in the last quarter, why is that and in terms of your interest cost, where do you see that settling? A: The finance cost increased because of our non-funding activities in our non-fund base. Mostly our long-term bank guarantees, Letter of Credit (LCs), performance bond some orders which we got during the last one year, we have given the long-term bank guarantee, our performance bank guarantee, etc that is why it has increased and it is reflecting our results also. The profit margins has also gone up little bit. Some bank guarantees for one year to three years in some cases that is why it has increased. Ekta: Leave us with some guidance for example at least for your margin picture do you expect to maybe improve your margins from the current 11 percent that you recorded this quarter and if so how much do you think it would be by the end of the fiscal?A: We are expecting the growth to continue. The guidance as I already said around 20-25 percent in topline. Bottomline we are expecting much more higher. Bottomline compared to last year should 40-50 percent growth in bottomline which we are anticipating. So, this growth trend will continue compared to last year.