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Skipper Limited Sets Big Plans for PVC Pipes Business

Devesh Bansal, director, Skipper Ltd.

Skipper Limited, an integrated transmission tower manufacturing company which is also the third largest in the segment in India after KEC International and Kalpataru Power Transmission has lined up big expansion plans for its PVC pipes business.

Devesh Bansal, director, Skipper Limited told NDTV that it is constructing three new plants-in Sikandarabad, Telengana and Guwahati to expand its foot print across the nation in the PVC pipes business. (Watch)

The company currently has a capacity of 22,000 tonnes per annum in the PVC pipes business which will be increased to 1 lakh tonnes per annum with the commissioning of the three new plants.

"The overall capex that the company has outlined for the PVC business over the next couple of years is approximately Rs 100 crore, which would go into expanding its capacity to 1 lakh tonnes from 22,000 tonnes within next couple of years," Mr Bansal said.

The capex amount of Rs 100 crore will be funded through internal accruals and some debt, Mr Bansal added.

Skipper expects to make two of the new plants operational in the third quarter and one in the fourth quarter of this fiscal.

In FY 15 the PVC business contributed less than 10 per cent to the total net revenue of Rs 1,313 crore for Skipper. The company believes the PVC business will contribute around 30 per cent to its overall revenue by FY18.

Financials

Skipper Ltd. had reported a 232 per cent annual growth in its net profit at Rs 89 crore for the financial year ending March 2015. Its revenue grew 26 per cent during the same period to Rs 1,313 crore.

EBITDA or gross profit margins of Skipper Ltd. have consistently improved in last three years from 9.63 per cent in FY13 to 16.51 per cent in FY15. Mr Bansal said the company will be able to maintain its margins around 16 per cent in future.

As of 9.55 a.m., shares of Skipper Ltd. traded 2.4 per cent higher at Rs 149.5 apiece compared to 0.98 per cent loss in the broader Nifty. In last one month the stock has gained 3.39 per cent compared to 3.56 per cent loss in the Nifty.