PG Electroplast has plans to raise up to Rs 75-76 crore: Vikas Gupta, MD (Operations)

Vikas Gupta, Managing Director (Operations), PG Electroplast, talks about the March quarter numbers, fundraising plan and order book and margins among others during a candid chat with Zee Business Executive Editor Swati Khandelwal

"Amid the ongoing second wave of the COVID pandemic in India, we are a bit cautious but at the same time are optimistic that sales will pick up as soon as the unlocking process will begin," Vikas Gupta says

Vikas Gupta, Managing Director (Operations), PG Electroplast, talks about the March quarter numbers, fundraising plan and order book and margins among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: The company has posted good numbers for the March quarter and has reported a profit of Rs 10 crore compared to a loss of Rs 3 crore posted last year but the margins remained the same. What is the reason and do you think that the momentum will be maintained?

A: We have achieved the highest ever quarterly sales of Rs 330 crore in the quarter ended March 31, 2021. On a full-year basis, the sales stood at Rs 705 crore compared to Rs 641 crore posted in FY20, despite the first quarter of FY21 was completely washed-out, despite that, we have achieved a 10% growth. As you asked about the growth momentum in future, so amid the ongoing second wave of the COVID pandemic in India, we are a bit cautious but at the same time are optimistic that sales will pick up as soon as the unlocking process will begin. As sales are picking up, we are starting our factories and the order book that we have from the customers is looking good and is healthy. So, it seems that we will be able to maintain the momentum.

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Q: The company has planned fundraising via preferential issue by when it will happen and how will you utilize the proceeds? Also, what are your plans for product portfolio diversification? And globally there is a shortage of semiconductors. So, do you wish to foray into this segment?

A: We have taken approval from the board to raise funds around Rs 75-76 crore. Now, we will go in an EGM and take approval from the shareholders. So, the raised funds will be used majorly in the capacity expansion of our product business. In it, we are setting up a plant in Ahmednagar for which we bought a land parcel about three months ago. It is going to be a factory for air conditioners and it will be an integrated plant. At the same time, we are also starting a new plant in Greater Noida, where we are into the sanitary ware business and it is being expanded.

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Q: What kind of order book do you have and what is an outlook on order book in FY22?

A: We have a strong order book and we will try to maintain a similar momentum in FY22. At the same time, we are also adding new clients and products. So, we are very confident about the future.

Q: Is there expectations related to improvement in the margins in FY22, if yes, what is the range?

A: As far as margins are concerned, you are well aware that the commodity prices have put pressure on our cost. We are discussing and negotiating with our customers and passing on the price increase. There is momentum in sales. Going forward, the Diwali season in the coming months and Diwali is a festive season, when we record good sales. So, I feel, we will be able to maintain the order book in the future.

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