Answers to some important issues ...from the AGM
Q1) What is the present manufacturing capacity
Ans) cable - 3 million fiber kilometres per annum
FRB rods - 1.2 million kilometres in India plus 0.4 million kilometres per annum in Dubai
Optical fiber: 1.2 million kilometres per annum
Q2) What will be the manufacturing capicty after completion of capacity expansion?
Ans After capacity expansion, the increase will be as follows Cable from 3 million to 4.5 million fiber kilometres per annum
for FRP rods it will increase from 1.6 million kilometres to around 5 million kilometres and
optical fibers the increase will be from 1.2 million to 3 million kilometres per annum.
Q3) status and progress of the capacity expansion program?
They showed the investors the imported machines which have arrived in the company premises..the unpacking and installation will start in the next few days as soon as the engineers from England come.
Q4) What is the status on acquisition of unitape which was supposed to be completed in 15 days?
Ans) Unitape acquisition is almost over, will announce it as soon as the some pending paperwork is completed.
As per the details in the Annual report, various streams have caused a loss of around 21 crores and this has brought down the profit significantly. so want to know the stautus of those loss making activities.
Q5) There was an exceptional loss of 7.3 crores, going forward any more such losses can be expected?
Ans) That was a one time loss, there wont be any exceptional losses in the present year.
Q6) There was a loss of around 7.90 crores on account of Dubai operations which impacted the consolidated profitability?
Ans) Yes there was a loss in Dubai operations as we had taken a loan and the interest payments and depreciation impacted the profitability due to delay in operations. However, the Dubai operations are now running at a profit. So from this year, there wont be any loss on account Dubai operations..infact Dubai operations will add to the consolidated profits.
Q7) The Dubai operations showed a very modest turnover of just 14 crores..why?
Ans) OPerational issues in Dubai have been resolved and this year the output from Dubai operations will be around4.5 - 5 million Dollars (around 30 crore rupees)...and next year the turnover will further increase to around 50-60 crores as the Dubai plant is with very advanced technology.
Q8) There was a loss of 5.74 crores from the services vertical...are Aksh e mitra kiosks still making a loss?
Ans) No the Aksh e kiosks business is making a profit. The loss is on account of a business vertical which we are almost exiting...its IPTV operations in Jaipur..The loss is on account of depreciation of around 17 crores that is there for that vertical.
Q9) so why not fully shut it down?
Ans) Its now restricted to just Jaipur city...and since deprecition is a tax benefit to us, we don't want to forego that (maybe it means that if they don't show that depreciation then the income tax will be more)..the depreciation will be there till FY 2018.
the next few questions are on valuation and operations on e kiosks..
Q10) Srei infra has 40000 e kiosks and they are valuing that business vertical @ 2000 crores...how would you value your e mitra vertical?
Ans) May be sre infra is valuing that business because they want to sell it..But we don't want to sell our e mitra business, rather we want to further expand it.
Q11) Expand it? where? You already have 8000-10000 kiosks in rajasthan?
Ans) we are exploring the posiibility of starting operations in other states too..we see this as a growing business as time passes and as a interace between citizens and Govt. We also want to get more money out of such a huge network of emitra kkiosks...maybe by selling some items through this network
Q12) are you looking to sell patanjali products through Emitra?
ans) Yes..we are looking at patanjali and other products too for distribution through e mitra kiosks...intention is to get more profits out of this big network.
The next few questions are on the FRP rods, which the promoter and the management is very proud of..they say almost all the indian cable manufacturers buy FRP rods from Aksh Optifibre and good demand for it overseas too
Q13) Why are you selling FRP rods, why not expand the cable making business and use your FRP rods for your own business?
Ans) Our cable making business is already working at full capacity..further, we are expanding its capacity too..but we have gone for maximum expansion in FRP rods because while our margins are around 14-15% in Optical cables, we get much higher margins (above 20%) in FRP rods...so we think we should sell more of those items where our margins are higher.
Q14) But by selling FRP rods to your competitors, you are giving them ammunition to fight you in cable business and this brings down the margins in cable business?
Ans) In a way you are right..thats what our cables division incharge keeps telling me...to expand capacity for cables ...he wants us to make more and more cables as the demand is there...the Board will seriously look into this (expanding cables vertical)....maybe even take action on expansion of cables business.
Q15) on ophalmic blanks...
Ans) that's a business where 98% of the indian equirement is imported and we see a big demand for that too..after all that too is from a similar composition material which we are using for optical fibers..so why should it all be imported..why not we too make it in India...as the Prime Minister says..make in India..