"There is a slight slowdown but we are confident of achieving over 15% growth in the lighting & consumer durables business," he said on CNBC-TV18.
The company is considering acquisitions. "Our debt is very low at Rs 200 crore, which is 2.2 percent of our equity, and we don't have any cash flow issue at all," he added.
Below is the edited transcript of Shekhar Bajaj interview on CNBC-TV18
Q: How has the Q3 been because Q2 was really bad for you in terms of both EBITDA and your bottom line performance?
A: For lighting and consumer durables business, Q3 is a peak time and I think growth will continue as it has done in the first half. Also, lighting and consumer durables should do well. For project business also there is a good order book, therefore good billing will take place. However, there are some hits which are still to be taken, thus overall it will not show such a good performance. But overall, in 12 months compared to last year, the project business bottom-line will be far better than what it was last year, though it still will be negative.
Q: We have seen some slowdown in the consumer durable side. What is the growth rate that we could expect in the second half of the fiscal year?
A: There is a slight slowdown but still both in lighting and consumer durable we are clearly seeing a growth above 15 percent that includes price increase, may be 3-5 percent is the price increase but clearly including price increase on the 15 percent growth is very much on the cards. We are still pushing for 18-20 percent which was our internal thinking after the end of Q1-- we were still looking at 18-20 percent. We have still not given up and 15 percent-plus is clearly on the cards.
Q: The company was also actively considering an acquisition, any progress on that front?
A: Acquisition is something which we have been very active about but it is not working out. Recently, we had a discussion with a possible party with whom we were looking acquisition, the expectation was earlier X amount, now it has become may be 2X, so it is just not working out. Thus, nothing has happened but suddenly their expectation has gone up because they have seen other acquisitions taking place at much higher rate. So they also expect a higher amount. If we would have finalised it about couple of years back we would have got it at much cheaper rate.
Q: So you have completely dropped the acquisition plan or would you be looking at something else?
A: We are continuously looking at acquisition. I am talking about a particular one which I thought would take place. We had a discussion with them, but unfortunately, their expectations now have gone beyond our rate. So only that particular acquisition, not that we have given up acquisition, we keep on looking at other opportunities -- whether brand or companies or both of them -- we are always keeping an eye. May be at the right time at the right price we will get something.
Q: So have you defined a timeline for any acquisition or not really?
A: We don't have a time line, we don't have cash flow issues so if we get the right party we will pay cash immediately as soon as all the permissions are acquired and we have done the due diligence. So from our end it is getting the right product at the right price, that is all required. We can't say we are going to acquire something within three months at any price, that would not be a good logic.
Q: So what is the cash on your books?
A: Our debt is very low. Rs 200 crore is our debt which is 2.2 percent of our equity so it is very low and we don't have any cash flow issue at all.
Q: So any acquisition will be funded by debt?
A: I am saying the acquisition will take place. But first, we will use our internal accruals plus whatever debt is required which we are not utilizing and when that acquisition gets finalized, it depends whether it is Rs 500-crore acquisition or Rs 1000-crore acquisition. When that happens at that stage we will have to decide on the funding.
At this moment there is nothing hot that we can say is coming up in terms of acquisition. So just now thinking of funding is too early to worry about at this moment.
Q: What is the internal accrual or cash that you all have?
A: Last two years have not been very good in terms of our bottom line numbers because of number of projects which are being closed in the project business. So that is why there is not much of accrual but from 2014-15 we should have a positive accrual of at least Rs 100 crore per year.
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