We intend to invest Rs.8 billion to implement our expansion plan

01 Aug 2018 CW Staff

Founded in 1995, Kamdhenu Group is the market leader in branded TMT bars in India with a brand sales turnover of around Rs 80 billion. Specialised in steel, paints and allied products, the company follows a franchisee model for its steel business and has a committed chain of over 10,500 dealers and distributors in India. Satish Kumar Agarwal, Chairman & Managing Director, Kamdhenu, shares more...

Please highlight one major challenge faced in FY2017-18.
The introduction of the GST Act by the government was the major challenge faced by us in FY2017-18. GST gave the unorganised sector no other choice but to be tech-compliant. We took this as an opportunity where the manufacturing companies in the unorganised sector could come ahead and join our franchise business network. This increased our network at a rapid pace and enabled the unorganised manufacturers to earn a premium for their products, thereby leading to higher capacity utilisation. We also conducted series of workshops and seminars on GST by the experts for our staff, dealers, distributors and franchise partners, which helped them comply with GST provisions effectively and benefit from this game-changing tax reform.

Particulars	Net sales	Adjusted PBDIT	Reported PAT
FY2018 (Rs billion)	11.78	0.44	0.16
Growth over FY 2017 (in%)	43	34	100

What decision do you consider the biggest contributor to the company's growth in FY17-18?
Rapid infrastructure and real-estate development in India has opened opportunities for everyone catering to the sector, be it a raw material seller or buyer of finished products. Government schemes like Housing for All by 2022, Pradhan Mantri Awas Yojana and the smart cities initiative, among others, are expected to create an additional demand of 100-150 MT TMT bars in the coming years.
And at Kamdhenu, we are well placed to cater to the rise in demand for TMT bars and building materials.

Please share a decision you avoided, which could have otherwise impacted the company's top-line and bottom-line.

When GST was under the introduction phase (Q1 of FY2017-18), various business houses curtailed their business operations owing to lack of clarity on GST input credit, e-way bill, filling of multiple returns, reconciliations and compliances. We took the decision to increase our operations during this period and this positively impacted our topline and bottomline.

Going forward, what are your plans for the company's growth in FY18-19?
Kamdhenu brand production capacity currently stands at 2.5 MT per annum; through our 75 franchise partners spread across the country, we plan to double our brand production capacity to 5 MT per annum in the next five years. This will enable us to cater to the growing demand for TMT bars in the country with rapid infrastructure and real-estate development.

We intend to invest Rs 8 billion through our franchisee units to implement our expansion plan.

In July 2018, we launched a new series of Dual Paint 'Kamodual Luxury Emulsion' under Kamdhenu Paints, which can be applied on both exterior and interior surfaces, ultimately reducing the inventory cost of dealers and the final cost of the end-user.