The demerger of the $7.3-billion soaps-to-software conglomerate, Wipro Ltd, means the FMCG business of Wipro Consumer Care and Lighting (WCCL) will now run on its own steam. The arm that markets brands such asYardley and Santoor expects to earn R4,000 crore in the current financial year. In an interview with Debojyoti Ghosh, WCCL president Vineet Agrawal says he's confident of a healthy operating margin that would give the firm liberty to raise resources for expansion without having to go public. Excerpts
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 donít 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 WCCLís 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