Astral Poly Technik has started the commercial production of plastic water storage tanks in Aurangabad. The plastic storage tank segment is expected to generate revenue of around Rs 300 crore for the company.
Speaking to CNBC-TV18, Hiranand Savlani, CFO of the company said, “Normally this kind of business generates 4 times asset turn. We are going to spend roughly Rs 75 crore on that business and it will generate Rs 300 crore of revenue. Normally it generates 14-15 percent kind of EBITDA.”
Savlani informed that the distribution network for the storage tank is already in place.
“Most of our dealers and distributors are selling this water tank. Today Astral is having the strength of 30,000 plus dealers across the country. Plus, the brand we acquired has more than 500 dealers ready with them. So we have a sizeable network with us,” he said.
On the overall revenues, he said, “We are expecting Rs 100-150 crore revenue in the next 2 years from the plastic tank business. Our regular business will be generating 15 percent-plus revenue in both categories, pipe as well as adhesive.”
The company expects a strong Q4 for the adhesive business. On a consolidated basis, it is targeting 15 percent growth for the next 5 years and expects margins to remain sustainable at 16 percent.Watch the video for the full interview.