Bimal Thakkar, Managing Director, ADF Foods expects to see a turnaround in EBITDA margin from FY15. EBITDA margins expected to return to 15 percent in next five years.
Manufacturers of Indian pickles, chutneys, frozen foods, masalas, spices, ready-to-eat foods, ADF Foods has re-entered the domestic market after 10 years. Bimal Thakkar, Managing Director, ADF Foods expects the domestic business to contribute an ambitious 40 percent of revenue by 2020.
The company plans to invest Rs 100 crore in domestic business in the next five years and targets revenue of Rs 1,000 crore by 2020. It sees FY15 revenue at Rs 250 crore and plans to break-even in FY15. Thakkar also expects to see a turnaround in EBITDA margin from FY15. EBITDA margins expected to return to 15 percent in the next five years.
Also Read: ADF Foods promoters plan to raise holding in co to 60%: MD
The company also plans to expand its export business and introduce more distributors in the US and Europe.
He expects the US subsidiary to grow by 30-40 percent this fiscal year. The company is also exploring inorganic opportunities in the US.
He says the India-based business is still in the investment mode and hence loss-making.
Below is the verbatim transcript of Bimal Thakkar's interview with Sumaira Abidi and Reema Tendulkar on CNBC-TV18.
Reema: Could you start by talking about your India plans, your focus on domestic business currently, what is the growth rate in India, how much more are you targeting, the kind of investments that you are looking to make?
A: Our company has very ambitious plans charted out for the domestic market. We have re-entered the domestic market after about 10 years and we feel very optimistic about the growth in the domestic market.
We have launched a brand, Soul. Soul is our umbrella brand for the domestic market where we have got a lot of exciting products planned out. We will be rolling out close to 30-40 new products in the next 12 months.
Currently the domestic business is about 10 percent of our revenues and in the next five years we expect it to be around 40 percent of our total revenues. We have close to Rs 100 crore lined up for over the next four to five years on sales and distribution and advertising spends.
Reema: You want domestic business to be 40 percent of your revenues in how many years?
A: In the next five years. So, by 2020 we expect the domestic to be around 40 percent of our revenues.
Stay tuned for more…
ADF Foods stock price
On September 22, 2014, at 14:10 hrs ADF Foods Industries was quoting at Rs 76.50, up Rs 3.70, or 5.08 percent. The 52-week high of the share was Rs 79.80 and the 52-week low was Rs 40.55.
The company's trailing 12-month (TTM) EPS was at Rs 6.30 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 12.14. The latest book value of the company is Rs 73.51 per share. At current value, the price-to-book value of the company is 1.04.
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