Saturday, November 17, 2007

Mr. Saurabh Kumar Tayal, Chairman, Jaybharat Textiles and Real Estate Ltd

Jaybharat Textiles and Real Estate Ltd (JBTRL) is a Saurabh Kumar Tayal Enterprise engaged in the business of manufacturing cotton spun yarn and Two-for-One (TFO) yarn.   It is part of Tayal Family – the largest Knitwear manufacturer in India with around one-million spindles ( India has a total of 15 million non-obsolete spindles); and the group consumes around 6% of the total cotton production in the country. JBTRL is listed on the Bombay Stock Exchange BSE: 512233.

Diversifying from its textile business, JBTRL has recently entered into the real estate industry. Under its real estate ambitions, JBTRL is constructing a Shopping Mall-cum-commercial centre called Vapi City Centre in Gujarat on the National Highway No.8. The project area is approximately one million square feet with Shopping Mall, Multiplex Theatres, Restaurants, Food Courts and Banquets, Commercial Space and a Star Hotel.

Mr. Saurabh Kumar Tayal is Chairman, Jaybharat Textiles And Real Estate Ltd. After establishing in textile business, Tayal has put his sights on real estate with a plan to develop 16 locations across the country for creating Shopping Malls, Food Courts, IT Parks, Commercial Centers and Luxury Hotels. Being young and vivacious, Mr Tayal has exemplified his leadership qualities through the focused vision and achievement of business goals. 

Replying to Anil Mascarenhas of India Infoline, Saurabh Tayal says, “Going ahead, annual revenues will grow manifold with a higher contribution from real estate business compared to textiles.“

Give us a brief overview on the industry?

It's an encouraging market for the textiles business primarily because world over (particularly in the Americas and Europe) most of the textile units are getting closed due to higher cost of labour and competitive pricing. As a result, these opportunities are shifting to Asian countries like India where the skilled manpower is easily available and their costs are reasonable. Although rupee appreciation is a matter of concern to exporters, it has a marginal impact on manufactures of value-added products like ours.

Similarly, on the real estate front, the favourable atmosphere is going to sustain for a longer time because there is a genuine need for housing and commercial establishments. Especially, the housing industry is facing a steep demand as more and more families are migrating from joint-family to nuclear families. Also, with the booming economy the demand for quality-based residential towers, offices, shopping malls, hotels and other infrastructure-related facilities are growing.

What are the changing trends in both the sectors?

As indicated earlier, in textiles, the focus is now on developing value-added products as the consumers are more choosy in selecting the most comfortable and fashionable fabrics.

In real estate, the trend is to develop properties with state-of-the-art facilities – whether it is architecture, landscaping, facilities, maintenance, security, parking and power backup. People have become conscious of their lifestyle and expect those aspirations and values to be reflected in their living/work place as well.

What is your revenue break–up from each sector? Going ahead how is the break up likely to be?

Till this year, our textiles business has contributed 100% in revenues / profits. Going ahead, once our real estate projects go live, our annual revenues will grow manifold with a higher contribution from real estate business compared to textiles.

Would you look at exiting any business?

No. Over the last four decades our group has established a reputation of being one of the most-modern and largest manufacturers of processed knitted fabrics in India catering to garment manufacturers and exporters of well-known brands. In the future, our textile business will continue along with the real estate business.

Do you have any land bank?

During the long history in the textile sector, Jaybharat has acquired large land banks, that are now strategically located in the city centers.   Out of these, we are developing 12 properties.

Any new areas you plan to enter?

As of now, our focus is to expand and strengthen in the textile and real estate business. We may enter into new areas in the future depending upon the opportunities, cost-effectiveness and profitability.

What are some of the opportunities and challenges in each of your business?

As an established player in the textiles business, we have to keep an eye on the profitability on a day-to-day basis. However, in real estate we have to be more conscious of the market trend and the facilities that we are offering to our clients – i.e. whether it is in line with the changing pattern of usability.

What is the market size and your share in Knitted fabrics in the organized market.

Our group is the market leader in the manufacture of knitwear in India with an annual consumption of 6% of total cotton produced in the country. Capacity wise, our group has around one-million spindles against the total of 15 million non-obsolete spindles in the country. The sheer size helps us in easy procurement of raw materials and to maintain operational efficiencies.

To what extent are you backward and forward integrated? What is the cost advantage you enjoy?

Our prudent investment in installing fully backward and forward integrated units have resulted in reducing operating cost and increased our capabilities to service large-volume orders.

You are regular supplier to exporters of big brands like Wal-Mart, Marks & Spencer, JD Williams etc. But are you able to command a premium?

Yes, we are regularly supplying our products to big brands like JD Williams, Marks & Spencer and others. We are getting these repeat orders because of our emphasis on quality.

Your view on margins?

Yes, margins are directly linked to the value-added products that we offer to our clients. Hence, we have built in a system to design and develop value-added products on a continual basis.

Brief us on your textile units. What is your current capacity and utilization? Your expansion plans. How would they be funded?

Our textile units are located in Pulgaon (Maharashtra ), Bhilad (Gujarat) and Silvassa (Dadra & Nagar Haveli). The details are as follows:

Installed Capacity
Capacity Utilisation

(in Tones)
(%)

Spinning
10,262
72.56

TFO
13,000
11.99

Processing
15,000
84.62

We are currently implementing expansion programme with an investment of Rs3bn for installing 75,000 spindles along with matching processing and garmenting facilities. The funding is done through debt and internal accruals. After the partial installation, the spinning capacity is now raised to 14,500 tons with 82% utilisation.

What is your power cost?

For the year ended March 31, 2007, the power cost (including fuel) was Rs178.8mn accounting 7.16% of our total sales.

Tell us about your properties which you plan to develop. What is the business model here? What kind of revenues/profits do you expect from this business?

We are developing our properties in Vapi, Navi Mumbai, Silvassa and other locations. The business model is to develop and sell off some parts (like residential, commercial centres, IT parks) to fund the project. We are expecting huge revenues/profits from these projects.

Which are the segments where you will be getting into to utilize your land bank?

Primarily for developing residential towers, IT parks, commercial centres, warehouses, shopping malls and hotels as per the market demand.

What kind of partnerships have you struck?

We have collaborated with the top partners for architecture, construction and marketing in the country to ensure successful execution of each project.

Will you separate the business?

No such move is planned as of now.

What is your dividend policy?

We do have a clear policy in place for our valued shareholders. After completion of each project, we will be announcing appropriate dividends depending on the market dynamics.

Your message to shareholders?

We are grateful to the shareholders for their immense support and encouragement over the years, and would request to continue with us for a more rewarding long-term association.

source

4 comments:

Anonymous said...

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