Nitin Fire has posted a 4 percent rise in net profit at Rs 21.2 crore as against Rs 20.4 crore for the quarter ended December. Net sales jumped 97 percent to Rs 400 crore and Operating margins stood at 9.3 percent as against 14.3 percent on a year-on-year basis.
Discussing the earnings, Rahul Shah, ED, Nitin Fire, said the company can sustain margins at around 11-12 percent and has been targeting a revenue growth of 25-30 percent in FY15. “We are targeting to become a billion-dollar company by 2020,” he added.
Below is the transcript of Rahul Shah’s interview with Ekta Batra & Reema Tendulkar on CNBC-TV18.Ekta: If I look at your revenue growth, it has gone up 100 percent, Rs 400 crore compares to Rs 203 crore year on year. What lead to that?A: There are lot of project which were there in the pipeline which have started moving both in India and internationally and we have seen that momentum to continue as lot of people have started moving towards latest product development. We have invested lot of money into research and development (R&D) and which is helping us in getting into those newer markets and newer geographies.
Reema: Going ahead given the order momentum that you have seen, what can be an average revenue run rate per quarter?A: Annually we are looking at 25-30 percent growth rate to come on because of the nature of the business of the project cycle; every quarter would be different from each other.Reema: Would that be growth in FY16 or you are hoping to end FY15 with 25-30 percent growth rate?A: FY15 would be 25-30 percent than FY14 but we seem to continue that momentum. The target is by 2020 to become a billion dollar company and I hope the way things are moving, it looks like to go on that way.Ekta: Can we expect Rs 400 crore in Q4 as well?A: It should be in that range. The current run rate looks like very positively achievable on that basis. Ekta: A question on your margins because your topline growth seems to have come at the cost of your margins coming to 9.3 versus 14 percent year on year. What led to the total expenditure rise and is that a sustainable margin picture, a new normal that the company will be working with – 9-10 percent?A: We are working on increasing by about 100 bps margin and we would see going forward between 10 and 11 percent of margins. However, because of the project cycle and the cycle nature of the business you will find every quarter having different but about 11-12 seems to be a sustainable margin going forward.
Reema: The Company spoke about making a lot of investments. What has been the extent of investment that you have made in FY15 and how much are you looking to invest in your business in FY16?A: We are looking at certain organic and inorganic growth, so we have been investing into R&D lot more to get into newer products and newer geographies and expanding the portfolio. Defense is another field which we are looking at aggressively and move forward into those sectors which would shortly come in, clicking revenue by ’16.Ekta: When you say looking aggressively into defense, what do you mean? Are you going to start bagging order within the defense space, have you already bid for it and what is the revenue potential?A: The potential into defense sector is very large and we have certain products which are currently under development specifically for protection into defense equipments and defense vehicles which will surely start coming in by FY16 but the revenues currently are looking very positive and very large. So let’s see how the numbers come out. Reema: You also spoke about the company exploring inorganic opportunities, anything on the anvil?A: Currently things are under diligence but it should happen in Q1 of next year. Ekta: For this quarter in terms of Rs 400 crore sales, where did you generate it from, which orders, which sectors, which segments?A: Those are mostly industrial sectors because we largely focus into industrial sector completely which has given us this growth and we look forward for more infrastructure and industrial growth to come in into different geographies where we are looking at.
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