 "Shilpi Cable endeavours to be a billion dollar company by 2020: Manish Goel")
Founded in 2006 to manufacture RF cables, Shilpi Cable Technologies Limited (SCTL) has become a specialist across the varieties of cables widely used in telecom, automotive and energy segment. With an annual turnover of Rs 3,200 crore, Shilpi has been investing in cutting edge technology for enabling it to develop value-add offerings in high growth areas – a key element of Shilpi’s transformation agenda.
The company is aiming to become a billion dollar company by 2020. In order to achieve this goal, Shilpi, which has been focusing on B2B business, has now also started servicing B2C segment by manufacturing wires and cables for household business. In addition, the company is planning to venture into LED lighting vertical and expand its overseas business.
In this interaction with Rakesh Rao, Manish Goel, managing director, Shilpi Cable Technologies Ltd sheds light on challenges & opportunities in wires & cables industry, and his plans to tap the emerging prospects in the market.
We have posted strong numbers this quarter and our business continues to grow in line with our expectations. Expansion in different vertical has helped us to continue the momentum of our growth.
For June quarter, the company’s consolidated net profit increased 45.23 percent to Rs 54.49 crore compared to 37.52 crore for the first quarter ended June 30, 2015. The consolidated revenues too were up by 43 percent to Rs 1010.88 crore as compared to 704.87 crore.
Of the three major user-industries, ie telecom, automotive and energy, which offers high growth potential? Also brief us about growth prospects in these three segments for Shilpi?
Shilpi Cable has an advantage of being a diversified group with focus on automotive components, telecom cables and accessories, electricals and white goods segment. All the industries that Shilpi is serving are currently going through a very exciting phase. Shilpi Cable Technologies’ 23 percent revenue come from telecom segment, 21 percent automotive, 10 percent from the consumer durables/assemblies, 12 percent from energy cables and rest 34 percent from copper wire conductor business.
Government has announced some of the ambitious initiatives such as Make in India, Digital India, Smart Cities, etc. What do these initiatives mean to the company like Shilpi Cable?
These are positive announcements that have been made for the betterment of India in the long term. The Make in India campaign has given a much needed push to revive the manufacturing sector in India. Not only indigenisation will increase but export will also pick up. All these developments open up huge opportunities for Shilpi to scale the growth of the company to higher levels.
Do you feel the NDA government has been able to meet the expectations of the industry?
The first year of the NDA government shows its determination and ability to face the multi-faceted problems that beset India. Moreover, the government has been successful in putting India on the global map for investment.
What are the key challenges before cable manufacturers in India?
The main challenges about the wire and cable industry is the price rise and competition from Chinese imports. Furthermore, importance of certifications like ISI and BSI are also required for better working operations.
From raw material supply point of view, how is the demand-supply of polymers and copper? Is low commodity prices a boon for you?
For polymers and copper currently, we see a steep downward trend due to recent fall in the commodity and crude oil prices. However, upward or downward movement of prices does not affect our margins as we are naturally hedged by our customers, as all pricing is directly linked to raw material pricing.
You are planning to venture into B2C segment. Could you please elaborate on this move?
We endeavour to be a billion dollar company by 2020. For this along with B2B business, we have also started servicing B2C segment by manufacturing wires and cables which can be used in local household business, thereby expanding our customer base. We have plans to enter LED lighting vertical in an aggressive way in current year under the brand SAFE. Last fiscal, the company generated revenue of Rs 50 crore from retail sales and we are expecting it to grow up further as more products are being added under the brand.
Are you planning to invest in capacity expansion? If yes, please elaborate
New product design and development is a crucial factor for the survival of a company like ours. In an industry that is changing fast, firms must continually revise their design and range of products. This is necessary due to continuous technology change and development as well as other competitors and the changing preference of customers.
Currently, we are aggressively working on introduction of new products. We are planning to expand into antenna and in building solution product in telecom infrastructure market, to expand our capacity for magnet wire segment and also to introduce new products in our basket for B2C segment.
Combined with our culture of continuous improvement and technical innovation, Shilpi Cable offers superior quality cables and creates lasting relationships in the industry that will enhance Shilpi’s portfolio in India and other Asian and African markets.
How has been the performance of your exports business? Are planning to venture into more markets?
Shilpi started its overseas venture in 2011 and is now looking to expand its geographic foot print with key focus on emerging markets. Shilpi is exploring technology partnerships and opportunities to expand overseas operations. The company is also exploring technology partnerships to develop solutions harnessing its Indian operational expertise. Our annual turnover is Rs 3,200 crores and standalone Indian operation business turnover is Rs 1,400 crores. Shilpi has already started operations in Singapore and Hong Kong. We will soon be entering markets like South Africa and UK.
What are your growth targets for this year and beyond?
Through our organic growth approach we look forward to other segments and cater to more customers and different markets not only in the B2B category but also in the B2C category. We believe our ability to create value for all the stakeholders of the company has been the biggest achievement for Shilpi Cable till date. We are continuously growing at an average rate of more than 70 percent on a y-o-y basis and diversifying into new segments and adding new products in our basket.
The company is aiming to become a billion dollar company by 2020. In order to achieve this goal, Shilpi, which has been focusing on B2B business, has now also started servicing B2C segment by manufacturing wires and cables for household business. In addition, the company is planning to venture into LED lighting vertical and expand its overseas business.
In this interaction with Rakesh Rao, Manish Goel, managing director, Shilpi Cable Technologies Ltd sheds light on challenges & opportunities in wires & cables industry, and his plans to tap the emerging prospects in the market.
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Throw some light on your Q1 2015-16 results.
We have posted strong numbers this quarter and our business continues to grow in line with our expectations. Expansion in different vertical has helped us to continue the momentum of our growth.
For June quarter, the company’s consolidated net profit increased 45.23 percent to Rs 54.49 crore compared to 37.52 crore for the first quarter ended June 30, 2015. The consolidated revenues too were up by 43 percent to Rs 1010.88 crore as compared to 704.87 crore.
Of the three major user-industries, ie telecom, automotive and energy, which offers high growth potential? Also brief us about growth prospects in these three segments for Shilpi?
Shilpi Cable has an advantage of being a diversified group with focus on automotive components, telecom cables and accessories, electricals and white goods segment. All the industries that Shilpi is serving are currently going through a very exciting phase. Shilpi Cable Technologies’ 23 percent revenue come from telecom segment, 21 percent automotive, 10 percent from the consumer durables/assemblies, 12 percent from energy cables and rest 34 percent from copper wire conductor business.
Government has announced some of the ambitious initiatives such as Make in India, Digital India, Smart Cities, etc. What do these initiatives mean to the company like Shilpi Cable?
These are positive announcements that have been made for the betterment of India in the long term. The Make in India campaign has given a much needed push to revive the manufacturing sector in India. Not only indigenisation will increase but export will also pick up. All these developments open up huge opportunities for Shilpi to scale the growth of the company to higher levels.
Do you feel the NDA government has been able to meet the expectations of the industry?
The first year of the NDA government shows its determination and ability to face the multi-faceted problems that beset India. Moreover, the government has been successful in putting India on the global map for investment.
What are the key challenges before cable manufacturers in India?
The main challenges about the wire and cable industry is the price rise and competition from Chinese imports. Furthermore, importance of certifications like ISI and BSI are also required for better working operations.
From raw material supply point of view, how is the demand-supply of polymers and copper? Is low commodity prices a boon for you?
For polymers and copper currently, we see a steep downward trend due to recent fall in the commodity and crude oil prices. However, upward or downward movement of prices does not affect our margins as we are naturally hedged by our customers, as all pricing is directly linked to raw material pricing.
You are planning to venture into B2C segment. Could you please elaborate on this move?
We endeavour to be a billion dollar company by 2020. For this along with B2B business, we have also started servicing B2C segment by manufacturing wires and cables which can be used in local household business, thereby expanding our customer base. We have plans to enter LED lighting vertical in an aggressive way in current year under the brand SAFE. Last fiscal, the company generated revenue of Rs 50 crore from retail sales and we are expecting it to grow up further as more products are being added under the brand.
Are you planning to invest in capacity expansion? If yes, please elaborate
New product design and development is a crucial factor for the survival of a company like ours. In an industry that is changing fast, firms must continually revise their design and range of products. This is necessary due to continuous technology change and development as well as other competitors and the changing preference of customers.
Currently, we are aggressively working on introduction of new products. We are planning to expand into antenna and in building solution product in telecom infrastructure market, to expand our capacity for magnet wire segment and also to introduce new products in our basket for B2C segment.
Combined with our culture of continuous improvement and technical innovation, Shilpi Cable offers superior quality cables and creates lasting relationships in the industry that will enhance Shilpi’s portfolio in India and other Asian and African markets.
How has been the performance of your exports business? Are planning to venture into more markets?
Shilpi started its overseas venture in 2011 and is now looking to expand its geographic foot print with key focus on emerging markets. Shilpi is exploring technology partnerships and opportunities to expand overseas operations. The company is also exploring technology partnerships to develop solutions harnessing its Indian operational expertise. Our annual turnover is Rs 3,200 crores and standalone Indian operation business turnover is Rs 1,400 crores. Shilpi has already started operations in Singapore and Hong Kong. We will soon be entering markets like South Africa and UK.
What are your growth targets for this year and beyond?
Through our organic growth approach we look forward to other segments and cater to more customers and different markets not only in the B2B category but also in the B2C category. We believe our ability to create value for all the stakeholders of the company has been the biggest achievement for Shilpi Cable till date. We are continuously growing at an average rate of more than 70 percent on a y-o-y basis and diversifying into new segments and adding new products in our basket.