V-Guard Industries Limited, a Kochi-based electric equipment manufacturer, sees recovery on its earnings before interest, taxes, depreciation and amortisation (EBITDA) margins on anticipated revenues of Rs 420 crore in the next financial year, according to executive director Mithun Chittilappilly.
The company expects its EBITDA margins to decrease slightly to around 10.06 per cent and profit before tax (PBT) to nearly 7.8 per cent this fiscal, from 10.66 per cent and 7.86 per cent respectively last year. V-Guard’s EBITDA was at Rs 30.82 crore, while its PBT stood at Rs 22.73 crore last year.
“Copper prices have dipped 50 per cent while aluminium prices crashed substantially, which we expect will translate into higher margins from FY10,” Chittilappilly told mediapersons here on Thursday, adding the company hopes to achieve about 40 per cent growth in revenues during 2010-11, over the projected Rs 420 crore for FY10.
V-Guard, which went public in February 2008, has utilised Rs 45 crore of its Rs 65.60-crore IPO proceedings for setting up low tension (LT) cable and building wire cable manufacturing facilities at Coimbatore in Tamil Nadu and at Kashipur in Uttarakhand respectively, which went on stream recently. The company already has a manufacturing plant in Coimbatore with a capacity to process 100,200 tonne copper per year.
Chittilappilly said the two new facilities, upon running with full capacity, were expected to bring in Rs 200 crore revenues in the next two years. The LT cable market in India, which is mostly fragmented by the unorganised sector, is currently pegged at Rs 3,500 crore while the wire cable market is at about Rs 3,000 crore.
“We are already doing close to Rs 85 crore business in the housing wire cable segment. We expect to corner about 3 per cent market share in the LT cable market in the next two to three years while increasing our share in the wire cable business from the present 2.5 per cent to 6 per cent during the same time frame,” he added.
V-Guard reported revenues of Rs 290 crore last year. It expects to close the current financial year with Rs 315 crore.
