Interview with Salasar Techno Engineering Ltd

The idea is to maintain a strict financial discipline keeping the cost of borrowings at a minimum level, states Shashank Agarwal, Joint Managing Director, Salasar Techno Engineering Ltd. 

What is your take on Union Budget 2022? In your view, how does it fare for the capital goods sector?

India is most likely to be the third-largest economy in the world by 2030. Currently, the country is growing by 8% to 9% per year. Don't be surprised, if it crosses a USD 10 trillion economy by 2030. This philosophy is quite evident from the Union Budget 2022 with the government focusing on the development of basic infrastructure to achieve this goal.

The focus is on the development of core industries. Of course, high tech businesses like IT, telecom, fintech etc, will continue to grow at a very decent pace but, focus on the development of core industry and basic infrastructure will be at a much higher pace in terms of adding additional capacities.

For example, the Union Government has set a target to increase India’s steel manufacturing capacity to 300 million tons per year by 2030 which is more than double from existing current about 145 million tons. Just this one sector presents a huge opportunity for companies like us.

Can you shed some light on your recently completed/ongoing as well as future capex plans? Also, what are your debt reduction plans?

The company recently completed a capex of almost Rs 25 crore by establishing a new heavy steel fabrication division which is running at a good capacity. The capex plans on the anvil are a new galvanizing plant and a new heavy steel fabrication division at Bhilai with an investment of almost Rs 100 crore in total. The company is on a high growth path and expanding continuously on a year on year (YoY) basis, so as such the debt reduction does not seem to be a possibility. The idea is to maintain a strict financial discipline keeping the cost of borrowings at a minimum level.

At the moment, what are your top 3 strategic priorities?

Our top three strongest priorities are:

1.To maintain the market leader position in the telecom sector.

2.To establish as a significant player in the overseas market as transmission line towers and monopoles suppliers. 

3.To try and create a market leader position in the heavy steel structure sector.

4. What is your earnings outlook for the upcoming quarter?

5. The earnings are going to be decent in the upcoming quarter. We are targeting a YoY growth of 10% to 12% and it should reflect in every quarter.

6. What are your key growth levers?

7. Key growth levers would be Telecom, infrastructure development and growth of exports in the telecom/transmission line sector.