We will be debt-free by 24 months: Vikram Udeshi, Jayant Agro Organics
Vikram Udeshi, Jayant Agro Organics talks to ET Now about his upgraded CRISIL rating and also about his future plans for reducing the debt.
Edited excerpts
What kind of savings can we expect on your finance cost in FY18 onwards?
The company is already enjoying some of the best rates from the bankers. Although CRISIL upgrade has come now, but where the banking circle is concerned, our company has been considered as a top borrower.
So I do not see a very major change out. The company’s long-term borrowings are only about Rs 10 crores at the moment, major borrowings in terms of short term where we could see 0.1 to 0.2 bps savings in debt profile of about Rs 300 crores.
What about the upgrade?
Rs 30 to 50 lakhs could be the savings which could come in you can say roughly.
Are you looking at raising more money or increasing capital requirements at the company’s end with more debt?
The company would be looking at more debt at an appropriate time. The company has some capex plans but nothing in next six months.
Probably the capex will kick in after that and the spread will be about 18 to 24 months for the capex and company has sufficient cash flows coming in.
So I do not see a major borrowing programming, although we could have some borrowing come after six months.
On your long-term debt, what is the payment schedule there?
The payment is spread over next 24 months.
So in 24 months, you will be debt-free?
If we do not borrow anything more, we will be debt-free by 24 months.
Can you give us some light on what the volume growth outlook is and where you see your margins more importantly by the end of the year?
The current year we continue to grow at a healthy pace. We are growing at about 20 per cent, between 15 per cent and 20 per cent year on year.
We do not see any dip at this moment but that could have an impact on second half if there is something very volatile. Right now we are quite comfortable and I see continuing growth. Also, our profile has changed because we have moved into more value added products and we have done a lot of work on improving our efficiency and cutting costs.
What would that do in terms of your sales and profit targets for FY18, could you leave us with targets on sales and profits for FY18?
For FY18 the management has not come out with any forecast at this moment because we are still working on budget for the next year and some of the listings but we do not see a major change because of all the steps taken we should be able to protect the margins subject to the volatility and of the commodity itself I think the growth should continue.
Edited excerpts
What kind of savings can we expect on your finance cost in FY18 onwards?
The company is already enjoying some of the best rates from the bankers. Although CRISIL upgrade has come now, but where the banking circle is concerned, our company has been considered as a top borrower.
So I do not see a very major change out. The company’s long-term borrowings are only about Rs 10 crores at the moment, major borrowings in terms of short term where we could see 0.1 to 0.2 bps savings in debt profile of about Rs 300 crores.
What about the upgrade?
Rs 30 to 50 lakhs could be the savings which could come in you can say roughly.
Are you looking at raising more money or increasing capital requirements at the company’s end with more debt?
The company would be looking at more debt at an appropriate time. The company has some capex plans but nothing in next six months.
Probably the capex will kick in after that and the spread will be about 18 to 24 months for the capex and company has sufficient cash flows coming in.
So I do not see a major borrowing programming, although we could have some borrowing come after six months.
On your long-term debt, what is the payment schedule there?
The payment is spread over next 24 months.
So in 24 months, you will be debt-free?
If we do not borrow anything more, we will be debt-free by 24 months.
Can you give us some light on what the volume growth outlook is and where you see your margins more importantly by the end of the year?
The current year we continue to grow at a healthy pace. We are growing at about 20 per cent, between 15 per cent and 20 per cent year on year.
We do not see any dip at this moment but that could have an impact on second half if there is something very volatile. Right now we are quite comfortable and I see continuing growth. Also, our profile has changed because we have moved into more value added products and we have done a lot of work on improving our efficiency and cutting costs.
What would that do in terms of your sales and profit targets for FY18, could you leave us with targets on sales and profits for FY18?
For FY18 the management has not come out with any forecast at this moment because we are still working on budget for the next year and some of the listings but we do not see a major change because of all the steps taken we should be able to protect the margins subject to the volatility and of the commodity itself I think the growth should continue.
