Atul Auto is enjoying a debt-free status: Jitendra Adhia

Jitendra Adhia, President (Finance), Atul Auto, talks about Q2FY21 numbers, capacity utilization, working capital requirement and expansion plans during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: Q2FY21 numbers reflect the weakness in terms of three-wheeler sales. Going forward, what is your outlook as respite is not visible there?

A: The way to look should be changed in the new normal. When we compare things on the year-on-year (YoY) basis then obviously there is some drop and there is a discouraging feeling. Under this new normal, we have to look into the situation that is created on the Quarter-on-Quarter (QoQ) basis. A little improvement is seen ahead but again we need to wait as three-wheeler is a micro-commercial vehicle. Around 80% of the passenger three-wheeler is contributing to the industry considering unlocking process is still on and social distancing is compulsory at this point of time. I feel we will have to wait for another one or two quarters after which the situation can become normal.

Q: What is your current capacity utilization at which you are operating at present and what have you dispatched in November and by when we will reach to the pre-COVID levels?

A: As far as capacity utilization is concerned, we are utilizing up to 40% and enough room is available. Going forward, there will be improvement month-on-month. November is going on, so its numbers are yet to come. October remained good for us and if compared with September then you will find that there was a substantial improvement. As I have told that we should wait for another one-two quarters to reach the pre-COVID levels. However, if recovery is concerned, then in October our cargo segment is showing 90%+ recovery and passenger application has recovered by almost 40-45%.

Q: How the company will tackle this slowdown, which has had an impact on your numbers? Are you thinking to slow down your expansion plans? Do you have any additional working cash requirements, if yes, then how will you meet those?

A: I am happy to inform you that we are still enjoying almost debt-free status. As far as working capital management is concerned, the company has maintained it efficiently and effectively. Going forward, we will not need such a big working capital requirement. When it comes to expansion, the company has already set-up its green-field expansion through internal accruals. The plant is ready and we are just waiting for a time and may commence the commercial production when there is visibility for demand. I feel this is a phenomenon which everybody needs to get-through with it. And, whenever there is a slightly upward turn happens, we will be ready with our complete capacity of 120 thousand units. As far as products are concerned then we are having a complete product pipeline basket available with us. We have three-wheeler available for all applications, all type of fuel, i.e. diesel, petrol, CNG, LPG and electric.

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