Mukesh Dhruve, Executive Director, Repro India in an interview to CNBC-TV18 spoke about the positive impact of falling crude prices for the company and the growth outlook going forward.
Although the fall in crude price does not directly impact them, it has surely helped reduce the freight costs on transportation considerably, which in turn has helped exports and thus made the more competitive, said Dhruve.
He did not give a definite outlook for FY15 revenue growth but said the company was doing extremely well and has become one of the largest education solutions providers in the country and also one of the largest exporters of books.
The company also has aggressive capex plans for the next fiscal, he said.
Below is the transcript of Mukesh Dhruve's interview with Reema Tendulkar & Ekta Batra on CNBC-TV18
Reema: How does the decline in crude price benefits the company?
A: Repro India is in the education value business, where we are providing value-added solutions to all our large MNC publishers. We are dealing with all the global publishers which include people like Pearson, Macmillan Publishers, Oxford, and Cambridge so on. We have the content with us, which we digitally warehouse and invest in that. We are dealing with them in India as well as outside India which is where your question will be answered specifically.
Since the content is with us we take care of their entire requirements within India which is pan-India as well as outside India where we are covering about 22 countries in Africa where we are exporting our books today.
Beside that we have invested in the new initiatives, the focus being the digital business or business which we provide through the tablets that we have acronym as RAPPLES it is Repro Applied Learning Solutions. Its means a 360 degree multisensory solution or preloaded books available on the tablets.
Ekta: On a point that you do publishing work, how would the paper prices be impacted because of crude and hence what sort of impact would that have on your margin?
A: If I have to look at crude does not directly impact us but at the global level definitely with the reduction in the prices we can see the advantages coming in the freight rates, we can see advantages in the inputs because one of the major input we have is paper where we can see the freight rates easing out.
As far as exports is concerned the way we send books the freight rate should ease out and that will make us more competitive in the market.
Reema: In the previous quarter it wasn't a great quarter, your revenues were under pressure, your margins declined. Overall for FY15 what is the expectation on revenues and margins?
A: If you are referring to the last quarter or the first half then we have invested a lot in the new initiatives mainly RAPPLES. In the previous year we invested an amount more than Rs 10 crore as well as capex of Rs 5 crore which we have expensed out.
In the current year also a similar kind of investment is happening which we are expensing out. We are not trying to put it as a prepaid expense but we are expensing it out as a result we are seeing an impact on the margins but I would say the margins are at the same levels and they are improving.
As far as 2015 is concerned, we do not give a forward looking statement but the company is doing extremely well. We are one of the largest education solutions providers in the country; we are one of the largest exporters of books.
The third area which is an interesting area is in the EE fulfillment or e–retailing, this an interesting area we are moving into and where we will be able to provide solutions.
Repro India stock price
On December 10, 2014, Repro India closed at Rs 263.95, down Rs 0.65, or 0.25 percent. The 52-week high of the share was Rs 303.00 and the 52-week low was Rs 137.60.
The company's trailing 12-month (TTM) EPS was at Rs 20.73 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 12.73. The latest book value of the company is Rs 190.79 per share. At current value, the price-to-book value of the company is 1.38.
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