Back

Analyst Meet / AGM - Analyst Meet

The order book is healthy with higher margins

Rajoo Engineers

11-Sep-2014, 06:59
In interaction with Mr. Rajesh Doshi, MD
Key Highlights

The company is into plastic processing machinery business or equipments used in production of plastic packaged goods. Internationally, the business is expected to grow around 7% while domestically it is expected to grow more than 15% p.a.
The company has all the necessary technology in plastic extrusion business. Although the company is open for inorganic growth, there are no immediate plans as such.
As per the management, even during recession period, domestically the extrusion industry will grow, only the pace would differ. In worst case, one can assume around 10% growth and in best case it can be as high as 25%. As per the management, the best period is yet to come in FY 2016 and in FY 2017.
Currently exports hover around 30-35% of total turnover. Exports share will keep on increasing even though domestic sales continue to rise, as the company will sell its products to new geographies and more repeat orders come in from same customers.
As per the management, the order book is healthy and with higher margins. Also the company has received good advance from the customers which has significantly improved the working capital cycle of the company.
Going forward, management expects operating leverage to kick in and margins will drive the bottom line growth.
While most of the capex is done, the company will expand through debottleneck of existing capacities.
Overall, higher margin, low interest and depreciation costs will drive higher bottom line. The company will continue to reward its shareholders and will gradually increase the dividend.