FMCG to become a Rs 10K cr entity
Power distribution, FMCG to account for major chunk followed by retail, IT/ITeS and carbon black
Actively looking at buys in FMCG space
If in terms of valuation, FMCG is likely to command a significant chunk of Goenka’s portfolio going forth, asset-wise, it will be power. In the primary business of electricity, Goenka has made a conscious decision to focus more on growing the distribution.
“We will expand in power distribution. We have concluded a distribution deal in Malegaon, which marks our foray into Maharashtra. In Bharatpur, we have started making profits, but not yet in Kota and Bikaner,” Goenka said, adding, “Distribution is where you are dealing with retail customers, so you have to be cautious.” CESC has 20-year contracts for Kota, Bikaner and Bharatpur. It also has power distribution rights in Kolkata and the adjoining Howrah-Hooghly belt and Greater Noida in Uttar Pradesh. The carbon black vertical is also assuming importance. Phillips Carbon Black remains India’s largest manufacturer of carbon black and is still looking to add capacity. “We will look at capacity may be Tamil Nadu or Andhra Pradesh,” he said.
Spencer’s Retail has just added 28 stores. “That is the largest expansion we have done in a year. Next year, too, will be similar, in terms of addition of square footage,” said Goenka.
On the IT side, Firstsource had applied for land in Bengal Silicon Valley and bagged it (for a BPO). Saregama, on the other hand, is getting its act together. “Four out of six films have done exceptionally well on digital media.
Eighteen films are under production right now. Films are going to be a big part of our business,” said Goenka, who is undecided on serials, but could give it a shot for digital streaming.
Goenka, made a debut in the luxury retail space with Quest Mall in 2013, is now looking for space to set up a mall along the lines of Foodhall.
The growth plans are significant but Goenka said that the balance sheet position is fairly healthy. “I think, we will close this year at Rs 2,500 crore PBT and PBDT of Rs 3,500 crore. Our debt-equity for the whole group is 1:1.1 which was 1:1.5, so debts have gone down.”