Targeting 80% capacity utilisation in FY17: Omkar Specialty

Riding on the back of a good fourth-quarter performance Omkar Specialty Chemicals wants to continue its momentum in the coming quarters. In an interview to CNBC-TV18, the company's Whole-time Director Omkar P Herlekar said the company is envisaging a growth rate of 10-15 percent in FY17.With the measures put in place by the company to enhance its capacity utilisation, Herlekar expects the company to clock in revenues of Rs 470 crore. Omkar Specialty Chemicals plans to increase its capacity utilisation to 80 percent in FY17 from 65 percent at present. In the March quarter, Omkar Specialty's revenues surged 53 percent to Rs 113 crore against Rs 74 crore in the corresponding year-ago period. Its EBITDA went up 95 percent to Rs 27.5 crore against Rs 14.1 crore in the fourth quarter of FY15, while EBITDA margins in the quarter stood at 24.3 percent. Net profit, however, slipped 25 percent to Rs 4 crore from Rs 5.4 crore in the year-ago period.The company's finance costs also surged 105 percent to Rs 8.2 crore from Rs 4 crore.Below is the verbatim transcript of Omkar P Herlekar’s interview with CNBC-TV18's Nigel D'Souza and Reema Tendulkar.Nigel: The numbers look quite good. Top line very impressive. Now you are doing Rs 110 crore on a quarterly basis. Going ahead should we maintain this kind of a run rate, Rs 100-110 crore because that is sharp improvement from what you were doing last year, Rs 75 crore approximately?A: We will be not just not only maintaining but we will over perform and definitely it will be in line with past track record only.Reema: So, what should be the revenue run rate that you will enjoy in FY17 and what will it take your aggregate FY17 revenue growth to?A: In FY17 we are envisaging a growth rate of 10-15 percent and going ahead we are considering FY17 as a consolidation year. So, we are assuming that yet we will grow at 10-15 percent and thereafter again the growth will be again posted exponentially.Nigel: So, around Rs 470-500 crore is what you are targeting for the coming financial year?A: Somewhat.Nigel: Also talking about your margins now, they are around 24.5 percent or thereabouts. Is this sustainable going ahead, can you better this performance?A: Definitely. As the capacity utilisations will enhance and the capacity will be utilised in a much better manner definitely this margin will be seen growing in FY17 as well as in FY18.Nigel: What is the current capacity utilisation?A: Current capacity utilisation on the blended basis is 65 percent.Reema: And how much could you increase your capacity utilisation to?A: It can go to 80 percent.Reema: In FY17?A: Correct.