We have bought a land parcel in Jhagadia for future expansions: U Shekhar, MD, Galaxy Surfactants

U Shekhar, Managing Director, Galaxy Surfactants, talks about Q2FY21 numbers, growth of Indian business and CapEx and expansion plans during an interview with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: The numbers have been good and there has been a better growth in your margins and PAT. What factors have contributed to this and what are your future projections in terms of volume and price growth?

A: Last quarter was very good for us in all the geographies including India, AMET region and the US. All the geographies and every subsidiary have progressed well. Growth was everywhere, if seen particularly in India then there was a 27% volume growth in the last quarter and it has been around 12.50% in the complete first half. In the AMET region - we have a factory in Egypt - there has been a volume growth of 8% in the last quarter and 6% in the first half of the financial year. Similarly, our growth has been a good one in America. So, it has been the record quarter for all the three subsidiaries. As far as the income growth is concerned, then you know that due to the pandemic personal hygiene and cleanliness has turned into the most important aspect for every citizen and individual and this is something that led to a growth in personal hygiene and personal products. At the same time, our good and speciality products have also grown and it helped in increasing our margins.

Q: India Business saw a jump of 27% growth YoY. Is this due to China substitution factor? How do you forecast India and International sales growth for the coming quarters?

A: China has never been a factor for us because we have been in India for the last 40 years and have been the market leaders. And, China does not have much import to the personal care industry in India. So not only in India but also across the world, China does not have any special contribution to our industry and our products. The growth that has to happen in the coming time will happen due to our innovations. You are aware of the innovative products that we have introduced in the non-toxic preservatives and their products are coming up. And, I feel that these innovations will drive our growth in the coming quarters. The performance of Surfactants will be retained and will encourage growth for us. Going forward in the coming quarters, I feel the percentage of our speciality products will increase gradually and the margins will also move up slowly.

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Q: What is the debt position of the company at present and by when you will turn debt-free? What kind of expansion plans has been lined-up?

A: Our debt-equity ratio is very low and I feel it stands around 0.3:1 and it will not take any time in being zero. But our CapEx plans are on in Jhagadia – where construction of mild surfactants is going on and Tarapur – where we are establishing a mini-plant for innovations new products. All these CapEx will be commissioned by April 2021. Apart from this, we have also bought some land in Jhagadia for future expansions. This year, the expenditure of our entire CapEx will be between Rs 150-170 crore. The CapEx of the US has already finished and it has been fruitful for us in the last two-three quarters and we are making some expansions in Egypt.