Source - CNBC-TV18
The auto sector has had a bumpy road for the last couple of months which has affected the margins of company’s like Bhushan Steel Limited.
Mr Neeraj Singal MD of BSL said that even though he expects a 40% increase in revenues this fiscal, margins will continue to remain under pressure.
Below is an edited transcript.
Q - With your Orissa expansion on stream, what is the business outlook of the current year? How much should we expect by way of improvement in revenues in the second half? Will margins remain above 29% that you have been managing in the first half of the year?
A - Our expansion has gone up well and our production has also stabilized. We hope to finish the year with about 1.7 million tonne of hot rolled coils. As far as the revenues are concerned, we should be having a total turnover of roughly between INR 10,000 crore to INR 11,000 crore this year which will be around a 40% increase over the last year. Definitely, margins are under pressure because of lower demand. Currently, the auto sector is not doing well. So there is definitely pressure on the margins this year.
Q - There was a decade old family dispute which has been settled by Bhushan Steel. This now paves the wave for you to actually raise funds more easily. What are the contours of this settlement? What is the fund raising plan going forward?
A - Basically we are moving towards the settlement that has been reached between me and my brother. It was in 2002. The same thing has been implemented now. There were certain small issues which existed at the family level and not at the company level. Those have been sorted out and everything is fine.
We have signed a final settlement and filed to the Company Law Board. Now there is no restriction on us to raise equity or anything. The way forward is definitely we will be looking at raising funds at the appropriate time and when the market improves which could be maybe in the first quarter of the next financial year.
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