See 12% growth for Pennar Industries over near to medium term: Aditya Rao, Managing Director
"We have had a good quarter and a good financial year. Five out of our six business units have shown growth on the top line."
ET Now: Your numbers have been good. I am surprised with the pace of the turnaround, though.
Aditya Rao: We have had a good quarter and a good financial year. Five out of our six business units have shown growth on the top line. All the units have grown on EBITDA and profitability front. It means we are on the right path and we look forward to further growth in the future.
ET Now: What are the projections that you are making for FY16?
Aditya Rao: I will not be providing guidance, but I can definitely say that we expect revenues across our business divisions to grow and margins as well.
ET Now: Could you sheld some light on when you are planning to take Pennar Infra subsidiary public?
Aditya Rao: There has been some progress since last we spoke. We have now filed a DRHP with SEBI and we are expecting their response pretty soon on that front. From a timeline point of view, we are well placed for the IPO to move forward in this financial year itself. But a lot depends on the response we get from SEBI.
ET Now: Is Pennar Infra a 100% subsidiary, or there are some private equity investors there?
Aditya Rao: There is a private equity investment by Zephyr Peacock. It is a fund based out of New York. They hold about 26% equity in Pennar Engineered Building Systems.
ET Now: What could be the kind of margin expansion? Closer to 15%?
Aditya Rao: We are continually adding new verticals, new businesses using the same core assets that we possess. These are all going to be at higher margin. Anything we add will be at 15%-plus.
This is a multi-quarter process. As our commodity business becomes a smaller and smaller part of the company, the natural result of that would be an expansion of margin which is exactly what we are seeing over the last few quarters.
ET Now: Current operating profit margins stand at 12%? How soon could that become 15%?
Aditya Rao: 12% will not become 15% very soon. The blended margin would be sticking closer to 12%. That will be our growth rate. It is not going to be 15% overnight or immediately.