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The Textile Magazine
August 2012
growing the share of the polyester
business where asset turnover and
ROCE is significantly higher.
Exiting and monetising
non-core businesses
The company has in principle
decided to exit all non-core busi-
nesses. Active steps are being taken
to sell the commercial real estate
that the company had invested in.
For Ashford Centre and Peninsula
Business Park, Alok has appointed
a leading global real estate con-
sultant and has already entered
into around Rs. 500 crores worth
of transactions. Cash flows from
these are expected by the end of the
second quarter of 2012-13. New
strategies are being developed for
the retail businesses in India and the
UK to make them thin on capital
intensity and bring some of the
capital invested in these ventures
back into Alok.
Generating free cash flow
With the intensive capex pro-
gramme almost complete, the
efforts at monetisation of non-core
business assets and improvement in
working capital cycle, one expects
improved cash flows in Alok’s sys-
tem. This improved cash flow with
the decision to undertake marginal
incremental investments would re-
sult in generation of free cash flow.
In this way, with a clear focus on
operations and ‘sweating assets’ it
should be possible to substantially
reduce debt burden and deleverage
the company.
Going forward, the
company expects the
macro-economic condi-
tions to be subdued
in the next couple of
years. Alok has the
integrated capacity
base in place supported
by strong customer
relationships. It is go-
ing to leverage both
these to gain market
share and continue
with the growth path.
The company remains
cautiously optimistic
on delivering results
with a strong focus on
improved returns on
Mr. Surendra B. Jiwrajka, Jt. Managing Director
cover story