Sitting in his Barakhamba Road office in Delhi, Amit Jain seems relaxed. It’s not a sight you come across very often these days — business after all has been rough in the past couple of years. But Jain, chairman and managing director of CMI, a Delhi-based specialty cables company has nothing to complain as his company has been going from strength to strength. “We made a Rs.100 crore acquisition when we were a Rs.140 crore company — it was the boldest decision I have ever taken,” Jain elates.
The corporate presentation shown to us before he arrives for the meeting paints the acquisition as a game changer for CMI. In 2016, Jain bought the Baddi plant of US-based General Cable for Rs.96 crore. The acquired facility complements the products already manufactured by CMI. Jain tells us how the ‘prized catch’ came through. General Cable invested Rs.400 crore in 2009 to build a cable plant in Baddi. In August 2013, the plant commenced operations but barely a year later production was halted. The appointment of a new CEO at the parent resulted in a major policy shift wherein they decided to sell all their plants in the Asia Pacific region, which cumulatively contributed 10% to General Cable’s $7 billion revenue. The Baddi plant was among those.
At the time of the acquisition, CMI had only one plant in Faridabad with revenue of Rs.300 crore, which had peaked in its utilisation. General Cable’s Baddi plant offered the potential to triple sales and Jain grabbed the opportunity.
Even though the acquisition has not yielded results yet, it has refueled the company for the next lap. Over the past five years, CMI has been on the fast track with sales and profit growing at CAGR of 45% and 42%, respectively. The company is expected to achieve sales of Rs.550 crore in FY18, with profit of around Rs.30 crore. When you ask Jain about the company’s performance over the past five years’, he goes into flashback mode, “In the past five years, we have reaped the fruits of our toil between 2008 and 2013.”