The company expects exports to contribute around 23-24 percent to revenue this year from 20 percent in the previous year.
Rico Auto expects over 10 percent growth in FY15. According to CMD Arvind Kapur, the auto industry will have a double digit growth this year though the car segment may grow only on the higher side of single digit.
The auto component maker's current utilisation is around 55 percent and expects improvement going ahead on the back of high growth, says Kapur from the sidelines of SIAM Convention.
The company has a long-term debt of around Rs 150 crore and short-term debt of around Rs 175 crore. "We expect to become debt-free by year-end and are looking at all the possibilities to pare debt," Kapur says in an interview to CNBC-TV18.
Rico Auto expects exports to contribute around 23-24 percent to revenue this year from 20 percent in the previous year.
Below is the transcript of Arvind Kapur's interview with Anuj Singhal and Ekta Batra on CNBC-TV18.
Ekta: We have seen a big pick up in car sales over the last three months. Since your company manufactures auto components, what can be the expected growth in FY15 on a blended basis according to you?
A: We expect about 10 percent or more than 10 percent this year as far as the component industry is concerned but if you look at the auto industry in particular -- the two-wheeler industry in any case we would probably have a double digit growth but the car industry would be in the region of close to higher single digit or around 10 percent.
Anuj: How much can margins improve from hereon?
A: The margins are related to the utilisation of capacities that we have already created. Since this utilisation has come down drastically, now with the improvements that are taking place in the market situation obviously the bottomline also improves. So we are expecting a lot of improvement to take place there.
Rico Auto stock price
On September 12, 2014, at 14:15 hrs Rico Auto was quoting at Rs 29.35, up Rs 2.65, or 9.93 percent. The 52-week high of the share was Rs 29.35 and the 52-week low was Rs 5.46.
The company's trailing 12-month (TTM) EPS was at Rs 0.35 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 83.86. The latest book value of the company is Rs 23.93 per share. At current value, the price-to-book value of the company is 1.23.
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