Even though the industry has seen a price increase to the tune of 12-15% in the last 12 months, the raw material costs also moves in tandem, so it is difficult to give an exact margin improvement number, he added.
The company had a new machine put up in August for further expansion. The month of October-December the company did see some advantage from this, however the full advantage of volumetric increase will be seen in FY14-15.
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Below is the verbatim transcript of his interview on CNBC-TV18
Q: We have seen fair bit of run-up in couple of stocks, how is the business shaped up in the last quarter?
A: I would say that the quarter as far as the demand is concerned has been fairly okay. As far as JK paper is concerned we started our new machine in the month of August and in the month of October to December this quarter we could get some advantage of the higher production from the new machine.
Q: For the last some time the industry has faced some kind of competitive intensity, we have seen lower pricing power in the hands of manufacturers. How is the pricing situation currently?
A: We increased our prices sometime in October and thereafter again increase the price in the month of December. So, I would say that something around 6-8 percent increase in the prices have happened in last three-four months. So I won't say that the pricing power has diminished for the industry.
Q: You were talking about the pricing power in your industry.
A: Since the industry was able to increase the prices different player, different timing or otherwise, 6-8 percent price increase in three-four months time is a good price increase and if you see the last 12 months the price increase has been something around 12-15 percent.
So that way since the incremental capacity has already been absorbed in the industry, so the pricing power of the industry has not been impacted that badly. But since the input cost pressure is so high - what kind of a price increase should be taken and what could be the accepted price increase in the market is a consideration always comes in the mind.
Q: If you have upped your prices so significantly in the last few months where would your margins be say by the end of this calendar year, how much could they improve?
A: It is very difficult at this point of time what kind of improvement in the margin will take place. It will be different for different companies. Although the prices are moving high but at the same time raw material cost structure is also moving in the same direction so they are in tandem.
Q: Last quarter you made losses, is the worst over for you and do you think you will make profits going forward and for the full year as well?
A: At this point of time I will not be able to make any comments.
Q: Given the capacity expansion that is already in place, what will be roughly the revenue growth that we could expect in FY15?
A: As I said earlier also when you see the capacity expansion, the natural volumetric increase itself should be somewhere around 40 percent and that should be the incremental volume increase in the company's top line.
Initially, the ramp up will take some time but possibly in FY14-15 we will have the full advantage of the volumetric increase from the new capacity.
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