From the sidelines of Kotak MidCap Conference, we have Naval Sharma, President, Kwality spoke to CNBC-TV18 on the outlook for business going forward.
He said for the next three years they will be growing at rate of 8-10 percent in terms of topline and expect the entire growth to come from business to consumer (B2C) segment. B2C is a strategic business segment for the company, he added.
The company will touch Rs 9000 crore in revenues by 2020 with EBITDA margins target of 9-9.5 percent, said Sharma.
Talking about debt, he said they are currently at Rs 1605 crore and of that 39 percent is long-term debt. To pare debt they are looking at 3-4 levers – one is capital structure optimisation, two, is revision of their rating from stable to positive, which would help them in negotiating better rates with bank. Three, as they change product mix, the overall cash conversion cycle which was is around 93 days will be touching 55-60 days. Moreover, four, as the value added product part of business increase, it will help generate lot of internal cash flows.
All this will help the company bring down debt and the cost of debt will also go down. They have a target of bringing debt down to
The company is among India’s largest private dairy companies and has a milk processing capacity of 3.4 million litres per day.
In the first half of FY18, they did margins of 7.1 percent compared to 6.9 percent in H1FY17. The total income was up 7.3 percent at Rs 3,246 crore compared to Rs 3,024 crore.
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