Wednesday, November 16, 2011

Interview with CEO of India Glycols....

Below is the edited transcript of the interview. Also watch the accompanying video.
Q: The bottom-line which in the second half last year saw phenomenal expansion and now you have surpassed the figure for last year. Is the second half seasonally stronger for you. What kind of guidance would you be giving for the second half going forward?
A: I do not see seasonality in our business; it is more of a function of the consistent improvement that is taking place because of change in our business strategy.
Our principal focus is more on supplying to large brand like Coca Cola etc on our business. These companies have launched bio-friendly packaging, we see secular volumes originating from these companies.
In that business we see significant growth in our natural plant product division. This is a steady improvement in our business and not seasonal.
Q: There has been a substantial increase in the EBITD margins of your chemicals business – on your overall basis it stands at 23% versus 6% any particular reason why you have seen such a sharp increase and can those margins increase further?
A: I would love to see them increase further.We hope to hold on to these margins since there is a possibility of raw material cost increase on the alcohol side. I am not sure that margins would increase, we should be quite happy if we to hold on to these margins.

Q: You have a very high debt on your hands and your debt equity almost looked four times. Any plans to scale this down and could you tell us what is the proportion of debt that you have overseas and domestic.
A: High leverages is a concern. In the first half itself we have repaid some amount of debt unfortunately because of the forex depreciation we have to revalue our assets liabilities.
Our total foreign currency burden would be about 40% of its total debt- if I were to exclude packing obtained in foreign currency for our exports.
If that number increases we are hedged but at the same time because of the steep depreciation we have to revalue.
Even though we repaid about Rs 100 crore of debt in first half the benefit of that got lost because of the revaluation.
Q: Will you repay more debt in the second half?
A: Yes.
Q: How much?
A: We expect to repay at least another Rs 100 crore.

Here is the link:

My Comments:
This is the latest interview from CEO of India Glycols after the results were annouced yesterday evening.
Above one can read which I have highlighted in RED bold letters that they have trimmed down the debt bt 100 cr in first half and they will again going to lower the debts by 100 cr in 2nd half which again coincides with what I wrote in last post about decreasing the debt by 50 cr every quater which I read somewhere.
That says that what I read and the figure I remembered were to the point correct.

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