Interview with Mohit Saboo, Director and CFO of BigBloc Construction Ltd

12 Jun, 2023

3 min read


Interview with Mohit Saboo, Director and CFO of BigBloc Construction Ltd
We are exploring opportunities for the export of AAC Blocks and have the vision to achieve a leadership position in the AAC block space in India, affirms Mohit Saboo, Director and CFO of BigBloc Construction Ltd.

In FY23, the total income of the company surged by 14.3% while the net profit of the company zoomed by 87.4% on YoY basis. What were the contributing factors which led to the overperformance? 

The revenue growth is mainly due to an increase in the selling prices of AAC Blocks which resulted in margin improvement for the company. Capacity utilization for FY23 was 83.44% which also helped the revenue and margins. 

Could you elucidate on noteworthy developments or partnerships in the company's recent business activities? 

Incorporated in 2015, BigBloc Construction Ltd is one of the largest and only listed company in the AAC Block Space with an installed capacity of 8.25 lakh cbm per annum.

We started in this industry in 2010 with a 1 lakh cubic meter (CBM) per annum capacity plant and within a year of setting up it, we sold it off for almost double the investment only to set up a 3 times capacity plant again in 2012.

Secondly, we then decided to acquire a sick unit and turned it around within 6-9 months and then did an expansion at this unit. 

Thirdly, we are the only company in India to have done a JV in this space with a Thai Multinational company Siam Cement Group for manufacturing of AAC Panels as well as blocks.

In a joint venture with Thailand’s SCG Group, the company is setting up a 3 lakh cbm per annum plant for ALC Panels and AAC Blocks at Kapadvanj Ahmedabad (Gujarat) and has acquired 60,000 sq mtr land for the project. The plant is expected to start commercial production in FY23-24. 

Today, we are the largest AAC Blocks company in western India and the only company to have sold a plant, acquired a sick plant and turned it around and then set up India's largest AAC Blocks plant and then did a JV with a Thai Multi-national SCG. Also, we are one of the only companies earning carbon credit in the industry and with upcoming planned expansions, we are slated to become India's largest manufacturer of AAC Blocks.

What are your future capex plans? 

- For FY 24, we have recently started commercial productions at our new unit at Wada, Palghar in the wholly owned subsidiary Company Bigbloc Building Elements Pvt Ltd with a capacity of 2,50,000 CBM per annum which is gradually scaling up. Once we receive EC for Subsidy purpose, we intend to take expansions on hand at this facility from 2,50,000 CBM to 5,00,000 CBM which will be at a capex of approx 18-20 Crores later on this year. 

Moreover, we have already bought land for our JV Company with Siam Cement Group and will be placing orders for machinery and start construction of the factory shortly. We intend to start commercial productions at this factory in Q4 FY 24 with a capacity of 3,00,000 CBM per annum for blocks as well as panels. Post that we intend to have a pan -India presence by putting up a plant in the North as well as South.

What is your earnings outlook for FY24? 

We intend to grow our earnings by 35-40% in FY24 from the above-planned expansions as new capacity is recently installed and another should be done by Q4 and hence, scaling up of capacities will happen gradually. FY 25 revenue growth should be much better.

The company announced that it has started marketing in new territories of Maharashtra and Gujarat. What strategies or initiatives is the company implementing to effectively penetrate and establish its presence in these new markets? 

- The company is developing new dealers and distributors across different cities and towns of these territories and bringing awareness of AAC Blocks by doing mock-ups and product demos. 

Currently, we have a presence only in Western India and we intend to have a presence in North and South India in the coming two years so ultimately having a pan-India presence. Apart from this, we are also exploring opportunities for the export of AAC Blocks. We have a vision to achieve a leadership position in the AAC block space in India.

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