Ma­jor Ex­pan­sion Plans To Max­imise Share­holder Value And Re­turns

Dalal Street Investment Journal - - COMMUNICATION FEATURE -

RCI In­dus­tries & Tech­nolo­gies Ltd head quar­tered at Delhi is one of the lead­ing com­pa­nies en­gaged in the sphere of of­fer­ing and ex­port­ing Copper items such as Copper Wires which in­clude An­nealed Copper Wire, Bunched Copper Wires ropes and copper in­gots which are used in dif­fer­ent elec­tri­cal and in­dus­trial ap­pli­ca­tions.

The com­pany has state of the art man­u­fac­tur­ing set-up at Baddi (H.P.) cou­pled with lat­est ma­chin­ery and equip­ment.

A ma­jor ex­pan­sion plan in or­der to re­place ex­ist­ing old as well as in­stal­la­tion of new plant & ma­chin­ery to en­hance the ca­pac­ity is F.Y. 2016-17.

RCI has raised eq­uity cap­i­tal of ₹11.5 cr at cash price of ₹40 per share in the year 2013. RCI mi­grated to main board on 12th Dec 2016.

FO­CUSED BUSI­NESS GROWTH PATH

Or­ganic Growth Path: As a part of or­ganic growth the com­pany pro­posed to in­crease ca­pac­ity en­hance 3000 MT to 7000 MT P.A. re­sult­ing in sales turnover to the tune of ₹280 Crores P.A.

On Inor­ganic Front: Com­pany has ac­quired busi­ness of M/s Devi Metal Tech­nolo­gies, part­ner­ship firm en­gaged in the man­u­fac­tur­ing of copper, brass, stain­less steel strips/sheet/coils. The unit is hav­ing state of art ma­chin­ery and in­fra­struc­ture to man­u­fac­ture and process 3000 MT of copper/ brass in a year which comes to ₹120.00 Crs. based on an av­er­age price of copper at

₹400/- Kg.

1. The Unit is hav­ing good in­fra­struc­ture and fa­cil­i­ties to cater to the wide ar­ray of cus­tomer’s re­quire­ment.

2. The cus­tomers of the unit in­cludes name such as Havells In­dia Ltd., Supreme Auto In­dus­tries etc. The unit is lo­cated in Baddi (H.P.) in an area of 9828 sq. mtrs. owned by the firm.

3. The unit has been taken over w.e.f. 01.04.16 and be­come a unit of RCI In­dus­tries & Tech­nolo­gies Lim­ited and named as “RCI Strips (A Unit of RCI In­dus­tries and Tech­nolo­gies Lim­ited)”.)

RCI In­dus­tries & Tech­nolo­gies Lim­ited (RCI) re­ported more than es­ti­mated re­sults for 4QFY17 and FY17 with Topline for the quar­ter in­creas­ing by 15% Y-O-Y and 43% Q-O-Q to ₹5,445 mn.

EBITDA grew sig­nif­i­cantly by 232% Y-O-Y to ₹281 mn (₹85 mn), EBITDA Mar­gins ex­panded by 336 bps to 5.15%. PAT for quar­ter in­creased by 293% Y-O-Y to ₹228 mn (₹58 mn), PAT Mar­gins ex­panded by 296 bps to 4.2%.

For full year FY17 the Com­pany re­ported To­tal In­come of ₹17,371 mn (₹12,710 mn) an in­crease of 37% Y-O-Y, EBITDA grew by 85% to ₹546 mn (₹296 mn) and PAT surged by 140% to ₹358 mn

(₹149 mn).

MAN­AGE­MENT COM­MENT

Com­ment­ing on this de­vel­op­ment, Mr Ra­jiv Gupta, Chair­man & MD, RCI In­dus­tries & Tech­nolo­gies Ltd. said, “I am happy to share with you that in line with our strat­egy we have con­tin­ued to fo­cus on prof­itable growth through a shift from trad­ing to man­u­fac­tur­ing.

The year 2016 has been a turn­ing point for our Com­pany on many counts. The most im­por­tant of these was start of the suc­cess­ful­ly­completed ac­qui­si­tion of M/s Devi Metal Tech­nolo­gies, a man­u­fac­turer of flat prod­ucts copper strips, foils, coils & sheets in Baddi, Hi­machal Pradesh. This de­vel­op­ment has al­ready made sig­nif­i­cant im­pact in the rev­enues for FY17 and we will see the full im­pact of the same once our ca­pac­ity ex­pan­sion is com­plete dur­ing the course of the year.

Our Com­pany has con­tin­ued to main­tain its strong po­si­tion in the trade and man­u­fac­ture of copper prod­ucts. Our abil­ity to of­fer a com­plete port­fo­lio of flat and round prod­ucts in copper, brass and to a small ex­tent in stain­less steel and spe­cial al­loys has made us a pre­ferred part­ner with our cus­tomers. The fo­cus of the Com­pany will con­tinue to de­liver value to our clients; to con­trib­ute to the man­u­fac­tur­ing drive of the na­tion; give ca­reer & growth op­por­tu­ni­ties to our em­ploy­ees and grow prof­itabil­ity ul­ti­mately lead­ing to max­i­miza­tion of share­holder value & re­turn”.

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