On track for 10-20% topline expansion in FY15: Bodal Chem

Written By Unknown on Kamis, 11 September 2014 | 23.25

In an interview with CNBC-TV18's Ekta Batra and Reema Tendulkar, Bodal Chemical executive director Ankit Patel said the company's key products used in dye manufacturing had witnessed a spurt after China's recent clampdown on pollution.

"For FY15, I see growth of about 10-20 percent on the top line. Bottom line is also going to be quite handsome," he said.

Below is the transcript of Ankit Patel's interview to CNBC-TV18's Ekta Batra and Reema Tendulkar.

Ekta: Overall domestic rates of chemicals used for dye manufacturing have zoomed up on falling Chinese exports. In fact, essential chemicals such as say vinyl sulphone, hydraulic acid and naphthalene which are key dye intermediaries manufactured by the company, have seen a sudden increase in prices. So what kind of impact are you seeing?

A: This has happened due to pollution restriction in China and also a little bit in India in past one year. So that has caused the disturbance in the supply of those particular materials to the global markets. So the supply and demand gap has formed and that is why the prices have zoomed up.

Reema: The company's revenues surged nearly 84 percent in FY14 on the back of higher realisations and increasing demand. What is the outlook for FY15, can you repeat the performance that you did in FY14?

A: For FY15, I see growth of about 10-20 percent on the top line. Bottom line is also going to be quite handsome.

Ekta: Can you quantify your expectations of your bottom-line improvement for us?

A: Not exactly at this point because the first quarter of FY14-15 was very well. Now the second ongoing quarter the prices have come down a bit but they are still in good range for margins.

So only with time to come we can tell what the whole year is going to be like. But due to this supply demand gap in India and China, I feel that the upcoming quarters will also be good.

Reema: You had taken a huge debt earlier to fund your capacity expansion plans. Could you tell us if your capex is on track and also a word on where the debt currently stands?

A: At our latest quarterly result, we have shown that we have paid back Rs 117 crore of our debt, which was part of our CDR and that has already been paid off. We are going to come out of CDR within couple of months because only the formalities have been left.

We are paying back our debt so that is our main focus at this point of time. We want to pay as much debt as possible with the time to come.

Ekta: The company incurred losses in FY12 and FY13 due to higher interest rates, depreciation and forex fluctuations. So can you explain FY15 on these lines?

A: It is actually a different scenario now because of the pollution problems and the restrictions on the manufacturing in India and China, mainly in China.

So lot of the manufacturing has been restricted or stopped in China majorly. So the supply has been disturbed by big numbers. The gap will be there which we have seen in last quarters. Due to that the numbers will stay good because the margins will remain good.


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