Replying to Yash Ved of IIFL, Sitaram. N. Saboo says “We close the exports by around 40cr in FY 2014 and planning to close 100Cr+ by March 2015.”
Brief about the Business Model?
The company was Incorporated in the year 1991. It is actively working on the development and growth of AAC Business along with Traditional Textile Business. It has two plants in Gujarat, spread over an area of 4 lakh sq. ft (Land area for Umargaon is 4.50 Sq.Ft and KIM is around 2.5 Lakh Sq. Ft) and have total capacity of 18,000 MTPA Draw Texturizing Yarn Production and 3,00,000 Cubic Meters Per Annum ACC block .
The Textile segment offers various textile products, such as texturised yarn, twisted yarn, grey cloth fabrics, and finished cloth fabrics. The AAC Blocks segment produces and markets auto-claved aerated concrete blocks. The company also exports its DTY yarns to South Korea, Italy, Spain, Germany, Mexico, Thailand, Peru, Bangladesh, South Africa, Egypt, Brazil, Colombia, Guatemala, Vietnam, and internationally.
What outlook do you see for the textile sector?
We expect India to gain commendable market share in the textile sector due to raw material advantage. India enjoys several advantages with regard to textiles – large pool of skilled labour equipped with design skills, flexible production systems, dynamic entrepreneurs and huge production capacity. These advantages have led to increase in gross textile exports. India accounts for 12% of the world’s production of fibre and yarn. We expect the industry to grow at a fast pace over the next 3-5 years driven by capacity addition and increasing wallet share of customers.
What are your future plans?
We have expansions planned in both the divisions – Textile as well as AAC Blocks Business. In the textile division the Company is already planning to put up 50 Shuttleless Looms, 6 Texturizing Machines and 2 Air-Texturizing Machines in the upcoming 9 months. In the AAC Blocks business, the company plans to install two more AAC Blocks Plant at Hosur (near Bangalore) by December 2016and the other near Ahmedabad by December 2017.
Are you focusing more on exports?
We are focusing more on Exports. Export for the last year ended 31st March 2014 stood at 40 Crores against which we have already achieved Export of 49 Crores for half year ended 30th September 2014. And we are targeting min of 100Cr exports by the end of FY 2015
What is the current capacity of texturised yarn?
The current capacity of Texturised yarns is 18000 MT per annum. We are further enhancing this capacity by 7000 MT to 25000 MT. This shall be completed in the coming 6-9 months by July 2015.
What is the current Capacity of Fabrics?
The current manufacturing capacity of fabrics is 9 Million Metres per annum. We are further enhancing this capacity by 4 Million Metres per annum to reach 13 Million Metres per annum. This shall be completed in the coming 3 months by Feb 2015.
Who are your clients for AAC Block Business?
Lodha Developers Private Limited, Housing Development Infrastructure Limited (HDIL), Larsen & Toubro (L&T), Regency Nirman Limited, Ashtech (India) Private Limited and many others.
Brief us about your Financials?
We have closed the topline of Rs. 225 cr in fy 2014 and in the FY 2015 we are going to close the topline of around 275cr and by 2016 we are hopefully cross 325cr with net margin of around 4 to 5%.
We close the exports by around 40cr in FY 2014 and planning to close 100Cr+ by March 2015.
What are your investment plans?
The Textile Expansion for 50 Shuttle-less looms, 6 Texturising Machines and 2 Air-Texturising Machines shall be done at a total capital outlay of Rs. 33 Crores out of which around Rs. 25 Crores shall be funded from Banks. Each of the AAC Blocks Plant shall be installed at a total capital outlay of Rs. 50-55 Crores.