The Hindu Business Line : Hind Sanitaryware on the lookout for acquisitions

Equipped with a cash chest of around Rs 70 crore, the company has initiated negotiations with a couple of domestic and overseas firms in the building products business. It is looking at Eastern Europe and East Asia for overseas acquisitions.

"Through inorganic growth, we are primarily looking at key benefits such as quick capacity additions, forward integration and access to both new technologies and markets," according to the Joint Managing Director of HSIL, Mr Sandip Somany.

The company has completed two rounds of preliminary meetings with the prospective sellers and would soon begin discussions on final terms and conditions. If agreed over the terms and conditions, HSIL would initiate measures towards due diligence, he told Business Line.

However, he declined to throw further light on these takeover targets terming that the negotiations were at a preliminary stage now. In the absence of clarity over terms and conditions and due diligence exercise, he was not sure of which of the acquisitions, domestic or overseas, would materialise before long. In any case, according to him, it takes three to six months time for any acquisition to materialise.

With the ceramic and glass facilities working at optimum capacities, following expansion and modernisation, the company is now bullish on its growth prospects. HSIL expects to attain a turnover of Rs 500 crore by March 2007 from Rs 330 crore as at the end of March 2005.

For the six months period ended September 2005, the company has posted a net profit of Rs 11.29 crore on a turnover of Rs 176.72 crore compared to a net profit of Rs 5.23 crore on a turnover of Rs 126.93 crore in the corresponding first half of previous fiscal.

"We expect to reap the full benefits of expansion and modernisation in glassware facility in Hyderabad and ceramic facility at Bibinagar near here from next fiscal onwards. Further, the newly launched range of bathroom products and kitchen solutions would significantly contribute to our turnover and profit from next fiscal. Of the targeted Rs 500 crore of topline by 2007, we expect around Rs 280 crore from building products division and around Rs 220 crore from glassware division," Mr Somany said.

According to him, the company is outperforming the industry in building products business with an annual growth rate of 25 per cent against 15 per cent of industry growth. Having already garnered a market share of 38 per cent in the domestic building products market, the company is targeting to improve the market share to around 43 per cent by March 2007, he said.

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