Initially, the company was worried that on account of prices being higher by 40 percent than last year orders would not flow through but over the past one month the company has received export orders worth USD 100 million, he said. On account of this, he expects 20 percent export growth for FY14 and domestic to growth by 30-35 percent.
The topline too would grow from Rs 2400 crore to about Rs 2800 crore for the year said Mittal and expects profits to be in line with the company's six month performance.
Currently, the company is not looking for any expansion plans but is in lookout for a place to put up a new plant, which could be in Madhya Pradesh, he added. Moreover, over a period of 3-4 years, the production from the new plant could move from 10 tonne per hour to 50 tonne per hour said Mittal.
Also read: Eyeing Rs 90-100 cr profit in FY14: LT Foods
Below is the verbatim transcript of his interview on CNBC-TV18
Q: The demand we are seeing for basmati rice. What is the outlook domestically as well as in international market?
A: As far as basmati is concerned, this is one of the most exceptional years in the industry; there is a good demand in export as well as in the domestic market. Initially, we were little worried whether at these high prices India would be able to sell and get orders from the overseas customers but in the last 20 days to one month we have seen good orders coming in.
KRBL has recently booked orders worth about USD 100 million and that gave us a way ahead that even at these high prices, which are about 40 percent higher over last year, we have started getting the orders.
However, same is the position for domestic market. Initially, domestic market was also not showing that much aggressiveness in the demand because of high prices but for the last one month-20 days good orders have been started coming in from the domestic segment as well.
Now we are confident that orders will continue and our worry that at these high prices, orders will not come, has gone out.
Q: Could you tell us what this will mean in terms of financials for the company given the strong order wins at very high prices, what will be the kind of revenue growth we could expect in FY14 along with margins?
A: We are expecting a topline of about 2,800 crore against our prediction of 2,300-2,400 crore. Our profits are also going to work out very good inline with our results of six months. So, overall the year seems to be exceptionally good year.
Q: A word with regard to your current capacity. Are there any kinds of expansion plans coming on stream?
A: There are no expansion programmes because we already have a very huge production line. We are known to have largest capacities in the world but we are planning to search another place like Madhya Pradesh (MP) or somewhere else to put up a new plant.
Q: What is the capacity of that plant you are planning on?
A: Initially, we will start with 10 tonne per hour but we will make minimum 50 tonne an hour in the course of three-four years but we want to see how MP region will work for us.
Q: You said you won orders worth USD 100 million in the last one month?
A: Right.
Q: Could you also help us with the improvement in revenues and this kind of order win. Will the company be generating cash per quarter? If yes, what would it stand at?
A: We will be showing our bottomline profits inline with our six months results and profits will be significantly high. There is no doubt about it. We are going to show excellent profit also.
Q: With the strong order wins of USD 100 million from exports, could you tell us what the export growth will stand at for FY14?
A: Our export growth will be about 20 percent.
Q: What is the expectation on domestic front?
A: Domestic will be around 30-35 percent. Domestic is improving much better. Domestic has remained a segment where it was not very prominent in basmati rice but in the last five-six years as the pocket money is expanding, the demand for basmati is also increasing.
Q: Any revision with regard to the price of rise?
A: Compared to last year they are this year 40 percent higher and we were worried initially in the month of October-November but now the orders have started coming.
Q: Your energy segment has been seeing some pressure in at least the last quarterly numbers, any outlook on that?
A: I will not be able to speak much on the energy segment at the moment but we are doing exceptionally well in that section as well.
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