Synergy among group companies may add Rs300 crore to Sintex topline

Ahmedabad-based Sintex Industries hopes that co-operation between its group firms will add Rs250-300 crore to its custom moulding business this fiscal, said group president Sunil Kanojia. That’s twice as much as in 2010-11.

Sintex’s subsidiaries in the moulding space include Bright AutoPlast Pvt Ltd, Wausaukee Composites Inc of the US and French company Nief Plastic S.A.

While Bright and Nief produce products for electrical and auto original equipment manufacturers, Wausaukee caters to the wind energy and transportation sectors.

Kanojia said these companies are helping each other with clients and suppliers in their respective geographies. “When we bid for electrical projects through Bright, we seek Nief’s assistance,” he told DNA Money on Tuesday. There are also cost savings when it comes to dealing with component suppliers, he said.

The company’s consolidated net sales last fiscal rose 35% to Rs4,483.71 crore. Of that, custom mouldings accounted for Rs1,870 crore, a growth of 25% over 2009-10.

“About Rs400 crore of that was from the group’s domestic operations,” said Kanojia, adding that synergy between the firms was responsible for about ¤150 crore of the custom moulding business. The company’s net profit grew 40% to ¤460.01 crore.
Kanojia also said that margins for the subsidiaries and the group as a whole have expanded. “When we acquired these overseas companies they had margins of 8-9% but now they are 11-12%. Even our Indian operations have seen an increase in margins from 20-22% to 25%.”

Sintex is looking to grow its topline by over a third this financial year. “Custom mouldings should grow 20%,” according to Kanojia.

Sintex acquired Bright in Septmeber 2007 for Rs149 crore in an all-cash deal and lapped up 100% of Nief in the following month for 30.9 million euros. It then bought an 81% stake in Wausaukee in May 2008 for $17 million.  Other than custom moulding, Sintex is into building materials and textiles.

Building materials is Sintex’s biggest segment, contributing 50% to its topline, textile 10% and custom moulding the rest.
Monolithic was the best performing sub-segment for Sintex in 2010-11, growing 85% to Rs1,337 crore. Sintex’s current monolithic order backlog is Rs2,900 crore.