Specialist in telecom, automotive and energy segment cables, Shilpi Cable has witnessed a 100 percent rally in its stock from July this year.
The company has initiated the expansion of its Chopanki plant and targets Rs 6500 crore revenue by 2020.
Speaking to CNBC-TV18, Manish Bhatt, CEO, Shilpi Cable said that the company has been able to create a professional set up for managing operations and a strategic level run by the promoters and the key management which has been working well for them.
Below is the transcript of Manish Bhatt’s interview with CNBC-TV18's Mangalam Maloo and Reema Tendulkar.
Mangalam: In the last five years your topline has grown close to about 66-67 percent but if you look at the whole cable industry itself the topline hasn't grown above, say 8-10 percent, at best 12 percent. What exactly has been carried on by Shilipi Cables to take this kind of topline. Could you also give us a sense of who your clients are?
A: If you see Shilpi is actually diversified into various segments, if you look it from the end customer point of view. So, we are into telecom segment, we are into automobile segment, we are into energy cables, we have recently launched a brand called Safe for house wire which is a B2C foray of Shilipi Cables. We are also into enamel copper. So, if you see we have various portfolio and from where we started we had a very small share and to us the market which we are in are pretty big.
What has happened in the last 3-4 years is that with our strategies falling in place and one is that we have been able to create a professional set up for managing the operations and a strategic level run by the promoters and the key management. This combination is working fine and on one side we are able to get increase of share and break into more accounts. For example, in telecom all our customers are all the Original Equipment Manufacturers (OEMs) and operators whether it is Airtel, Vodafone, you name it, Idea, we are supplying to each and everyone. So, similarly in each segment we have been able to get the cream of the customer.
Reema: Why have the promoters been reducing their stake? It stood at nearly 75 percent in 2011, it has come down to 36 percent, nearly 80 percent of the promoter stake is also pledged. Can you walk us through what the promoters\\' plans are?
A: What I can say is that as we are growing we have requirements of fund to fund our business and hence there is a strategic plan going on as to how to go about it. I may not be the right person to answer why the stakes are changing but definitely we are able to arrange our money what is required for the business and we are well placed to take on the growth.
Mangalam: You did say that you are looking at growing from retail and stuff as well but nothing fundamentally has changed in the domestic scene. While your international operations have seen phenomenal growth. So, in that case could you tell us who your overseas customers are because if we look at your annual report majority of your revenues come from the middle eastern parts of the world?
A: Our main strength is actually manufacturing and our view was that we have to go global. So, first to go global for an Small and medium-sized enterprises (SME) business in India is to know that market before investing.
Mangalam: Could you give us names of your overseas clients?
A: They all belong to telecom, they all belong to wire manufacturing. So, same industry.
Reema: Can you continue with this kind of a growth rate? What is your current order book and the visibility?
A: Each of the segment if you see for example telecom we were into RF cable, now we have announced a joint venture (JV) for getting into antenna which is another Rs 1,500 crore market. Similarly in auto though we are present in two wheelers and commercial vehicle. We are presently approaching the passenger vehicle which itself is 40 percent of the market.
Similarly energy cable we are presently supplying to let us say Reliance Jio but other operators now with the 4G roll out there is a huge opportunity. B2C we have just launched where we have been available now in 17 states and we want to expand it to all India in the next two quarters. So, we have a growth strategy in each segment and I don\\'t see any reason why we cannot continue with the same growth rate.
Mangalam: But if you look at your first half numbers your five year sales have grown close to 67 percent but the first half of this year itself is up just 26 percent. So, for FY16 what is the immediate growth that you would like to forecast?
A: To see this particular growth phenomenon you need to divide into international business and Indian business. Indian business as I was telling you we continue to do good or quarter-on-quarter (Q-o-Q) growth rate has been almost 30 percent. We have operational margins growth of almost 40 percent. But in our international business which is commodity based business presently with all the changes which are happening in that business we had, so, what we are trying to do here is to change the product mix and try and recover the lost market.
