Chemcon Speciality has a target to increase its revenue by 20% in the next financial year: Kamal Kumar Aggarwal, CMD
Kamal Kumar Aggarwal, Chairman & Managing Director, Chemcon Speciality Chemicals Ltd, talks about the proceeds of the IPO and where it will be used.
Kamal Kumar Aggarwal, Chairman & Managing Director, Chemcon Speciality Chemicals Ltd, talks about the proceeds of the IPO and where it will be used, revenue growth, demand in the oil field chemicals, the decline in revenue among others during an exclusive chat with Swati Khandelwal, Zee Business. Edited Excerpts:
First of all, congratulations on a great listing. Where do you plan to utilize this money? How much revenue increase should we expect from both the segments in which you cater ( Pharma Chem and oilfield chemicals)?
This is an IPO proceed and Rs 165 crore out of this will be used in our total capital expenses and working capital for an increase of the existing products and investment in new products. This is a capital expense plus working capital. We have a target to grow our revenue and profit after tax (PAT by 100% in the next couple of years. And a coming couple of year means by 2024, we should be able to multiply the revenues and PAT.
What revenue growth is expected if we talk in terms of percentage in these two segments?
We are targeting a 20% growth in the next financial year.
Watch Zee Business Live TV streaming below:
What kind of demand is coming in the oil field chemicals and how the lockdown has impacted the segment and have you started production?
We expected that demand should have started in September and it is in line. Last month, i.e. September as anticipated demands started and supplies were made. In the current month, we have an orderbook of about 70% of our production capacities and it will be utilized from the current month. So, the oil field demand has also started pouring in and production has regularized and supply will be regularized in this month.
Your revenue has declined by 13.50% from FY19 to FY20 and your debtors have increased by 39%. What can be the reason behind it?
COVID is one of the reasons. The payments got delayed due to it and this is one reason for debtors. Plus, we have an international competition with Chinese who revised their payment terms and started providing extended credit to the customers’ vis-à-vis we had to match things with it and match the credits. This also led to an increase in deters and it will be entertained. Besides, our volumes went up and because of the increased volumes, we had to sell these debtors under pressure a bit. And, current year onwards it will get regularized.
Your employee cost has declined by 42% in FY20. Was it a part of cost-cutting initiatives and will you sustain these numbers?
If you are looking at the employment cost of a year and a half year ago then please don’t compare things with that because at that time it was a private limited company. In a private limited company, the directors’ return was more. Now, today, after the listing and being converted to a limited company, we have brought it at par with the peers and directors’ revenue has been brought down the market levels or with the other companies. This led to the cost reduction and there is no cost-cutting measures has been taken, otherwise.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.