Tiles maker Asian Granito India Ltd (AGIL) sees demand for ceramic products staying high in the remaining part of the fiscal 2021-22 following a strong push from government spending and revival in demand from tier-2 and tier -3 towns.

The company’s management stated that in order to deleverage its books, it is raising funds through a ₹225-crore rights issue to reduce debt, and for expansion purposes.

Asian Granito subsidiary expands capacity at Mehsana

AGIL's plant capacity utilisation reached 95 per cent in March 2021. “Strategic growth initiatives, operational efficiencies, financial prudence, geographical and product expansion along with low capex and asset-light model for expansion are likely to drive the growth in the revenue and margins for the current fiscal,” the company said.

Asset and capital-light model

Kamlesh Patel, Chairman and Managing Director, AGIL, said, “In order to arbitrage the price of natural gas, management has decided to replace natural gas with propane gas whenever the price of propane goes below natural gas price. We believe that demand is likely to remain strong in domestic as well as international markets on account of government spending, revival of demand in tier-2 and 3 cities, replacement demand, etc.”

AGIL has gradually shifted from a B2B to B2C business model with its focus on the asset-light and capital-light model for expansion.

Asian Granito back in black in Q2 on lower gas prices, anti-China sentiment

“Today, retail sales contribute 42 per cent of the company’s total sales which was around 20 per cent a few years back. The improvement in retail sales has resulted in creating a strong brand value for the company, reduced dependency on low margin project business and improvement in margins,” said Patel.

Company has reduced its overall consolidated debt by ₹35 crore, resulting in debt-equity ratio of less than 0.5x. “The company is further committed to reduce debt in coming years,” added Patel.

AGM in August

AGIL has a tiles product range of ceramic floor, digital wall, vitrified, parking, porcelain, glazed vitrified, outdoor, natural marble, composite marble and quartz, among others. It also has CP fittings and faucets in its sanitary division.

“We believe that the ceramic industry will continue to show impressive performance in coming years. We are looking forward to repeating the current year’s success in the coming years too,” Patel stated.

AGIL has convened an extraordinary general meeting (EGM) on August 12, 202, through video mode to consider and approve increase in authorised share capital of the company from ₹47.50 crore to ₹65 crore and to alter the Memorandum of Association accordingly.

AGIL shares traded in the red at ₹178.45, down 1.49 per cent on BSE, Tuesday.

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