How do you plan to raise resources after the demerger
As a part of the demerger exercise, we got certain cash. The split was implemented based on the balance sheet of 2012. We had outside parties like Citibank, JM Financial, Deloitte and & Co that finalised the terms of the slpit as to who gets what and how. And also whether it will give fair value to the minority shareholders. Moreover, we have generated healthy EBIT margins. In FY12, we generated R400 crore and in this quarter, we had an EBIT of R140 crore. Probably on yearly basis, we are running an EBIT of R500 crore. We are generating a healthy cash on a yearly basis. This is not a highly capital intensive industry that it will suck out cash. And given our performance, we are confident that if required we can go to capital market to raise cash. As of now, we dont see a reason to get listed. If we need, we can always raise debt from the market from a resource point of view.
When do you expect the demerger process to complete
Demerger is not in our hands. There company is involved in a court case. The timeframe that we have set for demerger is well on track. We had an extraordinary general meeting (EGM) in December, and now the court will pronounce the result. I think, it should happen in next five to six months.
How do you rate WCCLs performance so far
We are on track to cross R4,000-crore mark this year. We are happy with our current state of growth. Earlier, in 2002-03, we were a R300-crore company. Both from an organic and inorganic perspective, we did well. We have a satisfactory growth rate. Overall, we are treading the right way. However, business from an environment perspective is under pressure. Lesser building and offices are coming up. But that is not much of a concern. In the commercial lighting segment, we are focusing on LEDs, which has grown over 50%. That give us two advantages, topline growth and better margin. In the furniture business, we grew 17% year-on-year during the quarter. We estimate we are number 2 player in the furniture space in the country.
Cumulatively, we have acquired eight brands in the last 8-10 years. We are selective in what we want. An acquisition has to fit into our strategy somewhere.
China has been a constant growth market for WCCL. How is it shaping up
China is a tough market, like India. We dominate certain provinces and we will try to focus on these markets than expand across the country. In last four years, we have been growing anywhere between 27% and 30%. This year we are growing 32%. We are only in southern provinces in China. We are close to about $40 million in China, which is small from an overall country perspective, but holds reasonable size considering the south China market. Our new acquisition of Singapore-based LD Waxson will help us expand business in China by 25% to touch $50 million. It also opens up Taiwan market for us.