Mr. Prashant Deshpande, Manager - Corporate Affairs, Bartronics India Ltd. Mr. Deshpande did his MBA from ICFAI after completing B. Tech from the JNTU, Hyderabad. He has over eight years of diversified experience in talent management, general management, strategic management and financial management.
Incorporated in 1990, Bartronics India Ltd. is a Hyderabad-based company that started with providing solutions in Bar Coding, one of the oldest AIDC technologies. The Company’s focus today extends to providing End-to-End solutions based on various AIDC technologies such as RFID, Biometrics, GPS/GPRS and Smart Cards. Bartronics’ focus is on supply chain and inventory management, logistics, time, attendance and asset tracking systems. Bartronics’ knowledge of products, technologies, implementation skills and understanding of the market place make it a dominant player in the domestic markets, and help it share exclusive relationships with many of the leading vendors in the world.
In an exclusive interaction with Hemant P. Maradia of IIFL, Mr. Deshpande says, “The Company is reorganizing itself along different businesses to have better focus and has clearly defined lines of responsibilities for each area of business.”
What led to the loss in Q4? Overall performance in Q4 was quite disappointing on all fronts (YoY or QoQ)?
The Management, in congruence with Board, has taken a conscious decision that the company has to consolidate its business and have its focus on quality customers in order to have high rate of organic growth. This made the Company accept fewer orders in comparison to the previous quarters, bringing down the sales. However, the reduction in the cost was not in line with the reduction in sales which led to losses.
In annual results, topline grew by 35% but PAT was down marginally?
There has been a general rise in prices of raw material that the company uses in order to provide solutions. This rise in the costs was not transferred to the clients during the period mentioned which reduced the PAT margin.
Also, for FY11, the company had a negative tax expense as deferred tax asset which had increased PAT % for FY11. However, the financial results declared for the 12 month period March 31, 2012, there was considerable tax absorbed by the company which reduced PAT margin further in comparison to the previous year.
How do you plan to turn things around? When do you see a turnaround taking place?
One can observe that the Company has substantial amount in receivables from sundry debtors and the average recovery period is around 360 days. Clearly, these are not at optimum levels for which the Management has taken a decision to consolidate its business for next 12 months around quality customers and have made efforts for the collection of these debtors. Also, the company is reorganizing itself along different business lines to have better focus and has clearly defined lines of responsibilities for each area of business. This entire process will create an organization which will have strong base of quality customers and a scalable model on which company will ride into growth phase.
What is the status of your business reorganisation plan prepared by KPMG?
The reorganization undertaken by the company as per the guidance of KPMG is near completion. For certain statutory/ procedural steps pending, the company has requested ROC to extend the financial year to September 2012 to be able to complete the reorganization in line with the statutory audit for these entities.
Are you confident of meeting obligations on your outstanding FCCBs due in Feb. 2013?
There are three strategies through which the company looks to address the retiring bonds in Feb 2013.
One, the company concentrates on the collection of sundry debtors and even the 50% collection of this will be sufficient enough to take care of all the bonds.
Two, in case the collection efforts do not yield results in time, the Company can look to dilute some of its stake in one of the entities which would be formed after the reorganization the company is accomplished. The fund thus generated will be used to handle the bonds.
Third, the Company is in touch with few institutions which are offering to talk with bond holders on our behalf and find out ways of restructuring the FCCBs and replacing it with new one.
Although a decision on the strategy through which the company plans to address the maturity has not been taken yet, the Company is very confident that it can take care of the maturity using any of the strategies/ combination strategies mentioned above.
Also tell us about the delays in the "Aapke Dwar" project? What is going to be the likely outcome for Bartronics?
As you are aware, we have moved this to Hon’ble High Court of Delhi requesting them to give directions for this esteemed project. As at the last hearing, the High Court has given clearance for an arbitrator to be appointed.
We expect a resolution to this in next 60 days or so. As the project is sub-judice, it will be inappropriate to comment on the possible outcome
Are you facing delays in any other project(s)?
There is no material delay in the execution of the projects won recently. However, there have been some delays in the execution of the projects won by the company about two years back.
Give us an update on your overseas business? Which markets are you upbeat on? What is the proportion of international business in total sales?
The Company’s overseas businesses continues show lot of traction and are expected to grow faster considering their small base currently. However, the management intends to implement the strategy of consolidating its business around quality clients even in these geographies.
The Company generated almost 56% of its consolidated revenues from its overseas operations.
What % of promoters’ shares is pledged with the lenders?
Promoters’ stake stood at 22.8% as at March 31, 2012 and of these 58% was pledged with the lenders.
What is the debt-equity ratio?
The Debt to Equity ratio as at March 31, 2012 was around 1.21.