Salzer to acquire Salzer Magnet Wires
Salzer is a leading player offering Total and Customized Electrical Solutions in Switchgears, Wires & Cables and Energy Management business. It caters to a wide range of products with five in-house manufacturing facilities located in Coimbatore and Himachal Pradesh. The Company has a wide distribution network locally and globally, exporting to more than 40 countries.
Replying to Newsbarons, R Doraiswamy, Joint Managing Director at Salzer Electronics informed “We continue to focus on adding new, niche and high margin products, enter new geographies and offer total and customised electrical solutions to our existing and new customers.”
NB: Brief us about your Financials?
R Doraiswamy: The company has posted a net profit of INR 9.87 crore for the 6 months period ended September 30, 2017 as against INR 9.70 crore for the 6 months period ended September 30, 2016. The company has reported EPS of INR 6.67 for the 6 months period ended September 30, 2017 as compared to INR 6.79 for the 6 months period ended September 30, 2016.
EBITDA stood at INR 12.9 crore in Q2 FY18 as against INR 12.0 crore in the corresponding previous quarter and Y-o-Y growth stood of 7.8%.
NB: How was the quarter as a whole?
R Doraiswamy: This was the good quarter in terms of profits and EBITDA margins. This growth was mainly driven by demand in our wire & cables business and a strong pickup in our industrial switch gear business.
NB: What is your outlook for the coming quarters?
R Doraiswamy: We continue to focus on adding new, niche and high margin products, enter new geographies and offer total and customised electrical solutions to our existing and new customers.
NB: Where do you see growth coming from?
R Doraiswamy: About 50% of our revenue comes from switchgear, 43% from cable business and 4% from Building Product division.
NB: Are you focusing more on exports?
R Doraiswamy: We are increasing our exports share to 30% from 23%.
NB: What is your outlook on margins?
R Doraiswamy: Our EBIDTA has also grown and we have shown improvement in margins sequentially of more than 270 basis points. This is an indication of our efforts over the past three quarters on improving our margins and increasing our operating efficiencies.
We expect this trend of margin improvement will continue and our endeavour continues to remain on profitable growth and improving our margins.
NB: Brief us about your acquisition of Salzer Magnet Wires?
R Doraiswamy: The Board of Directors have approved the proposal to acquire Salzer Magnet Wires Limited (SMW) as a going concern on a slump sale basis dated April 01 2017. This acquisition is subject to the necessary further consent from the shareholders of both the companies and clearance from the required regulatory authorities. This acquisition will be a big boost to Salzer not just in terms of immediate revenue and profit growth but more in line with our growth vision to add new products, customers and markets and offer complete electrical solutions as well as becoming a preferred partner for our customers.