Target 20% EBITDA margins by FY15 end: Shakti Pumps

In an interview to CNBC-TV18 Akhilesh Maru, CFO, Shakti Pumps spoke about the company’s third quarter performance and the outlook going forward.The company is targeting EBITDA margins of 20 percent by FY15 end. Targeted revenues are Rs 325 crore for FY15 and Rs 450 crore for FY16, said Maru.Going forward the company would be focus more on value added products, he added.

Below is the transcript of Akhilesh Maru\\'s interview with Reema Tendulkar and Sumaira Abidi on CNBC-TV18.Sumaira: Can you take us through what your volume growth has been like this time?A: We have already grown around 20-25 percent in terms of volume but for us volume is not exactly of significance because as we have a various variants where we have a value addition and the pricing gap is higher into that. So now we are looking for more higher value added products, which we are entering into Indian markets as well as in exports markets. So our focus is majorly into move towards the value added product rather than going for the volume business.Reema: Considering the company’s focus on value added business, you have already seen an improvement in margins. By the end of FY15, how much higher would your margins be as well as how much could they rise in FY16?A: As we have seen in the last quarter as well as year-on-year (Y-o-Y) basis, margins have improved a lot and in year-ending we are targeting to achieve around 20 percent EBITDA margin and at net level of around 9.5 percent considering 2016. We see a 10 percent net margin level where optimum utilisation level will benefit us because of that we will improve the margins at every level. Sumaira: Can you tell us what you are hoping to close out FY15 with and going forward into FY16 what are you hoping to do in terms of your total sales?A: In FY15 we are targeting around Rs 325 crore. Eventually, what happened in Q2 is that we have slowed down ourselves in the gulf areas, which was our major focus but we have recovered in this quarter in exports as well as domestic zone. Now we have recovered in exports in the countries where there is a less chance of geopolitical issues.Eyeing the potential of all these new countries, in 2015-2016 we are targeting around Rs 450 crore business, which we will get at 50-50 percent from domestic as well as exports market with the higher margin efficiency.