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For the current October-December quarter, he expects volumes to remain flat because of the price increase. On the positive side, he feels input cost will come down now that rupee has stabilised at around 62-63/ USD from 64-65/ USD levels. He expects the company to post a healthy profit increase for the full year.
Below is the verbatim transcript of Amritanshu Khaitan's interview on CNBC-TV18
Q: The stock is buzzing so much, is there any further price hike that you maybe planning because your last couple of price hikes were easily absorbed by markets.
A: We took a price increase announcement in October which is getting implemented as we speak now. This price increase was quite significant for the company and I think the demand has got slightly impacted but I think that is for a month or two and prices should get stabilised by January-February. So volume should thereby pick up again during next season for which it starts from April for us.
Q: For the October to December quarter could you tell us what will be perhaps the price increase or realisation improvement and volume growth post the impact?
A: We are looking at volumes remaining fairly flat because of the significant price increase, which we have taken. But at value growth, the company should clock between 13 percent and 15 percent turnover for the overall business. If you say for a battery business on its own, we should see a value growth of about 10 percent.
Q: What would be your market share currently and what would be your nearest competitor's market share?
A: Eveready's market share between two brands of Eveready brand and PowerCell together should be around 50-52 percent. The second competitor to us is the brand by the name of Nippo Batteries. They should be around 27-28 percent.
Q: Since October, when you put the price increase, could you tell us how the raw material pressures have been, has it eased a bit?
A: The price increase which we took was led by sharp rupee depreciation, which took place. We had factored levels of 64-65 when we took that price increase. Now with the rupee remaining stable around 62-63, you can say that the input cost should come down a bit compared to what it was in Q2.
Q: Just looking at your financials, for the first half your profit of Rs 8 crore is already higher than last full financial year of Rs 5 crore, what is the number that the market can expect for the full year?
A: I would not be able to give you an absolute correct number but I could say that a quarterly trend should continue in Q3. The Q4 is generally weak for us where last year we had posted a loss. So we should be looking at trying to at least breakeven in Q4. So for the full year, I think the company should post a healthy profit increase.
Q: Any new launches that the company has lined up or any fresh investments?
A: We are basically focusing our turnover growth to come from the lighting category where we are seeing 30-40 percent volume growth coming for us compared to last year and in this category we are just about to launch a range of LED-based products basically for home lighting, which should augment our turnover going forward into the next financial year.
Q: In terms of your debt, any plans to cut that down and save on interest cost going forward?
A: We have already repaid about Rs 50 crore this year which was our stated plan and I think the interest saving from that should reflect in the following financial year where our interest cost should drop from around Rs 40 crore down to about Rs 25-27 crore. Thereby following again we should repay loans by another Rs 50-60 crore and this cycle of debt repayment should continue. Apart from operating performance, I do not see any other income coming in the next 12-18 months to bring down debt further.
Q: Where does the debt currently stand at?
A: As of now our debt is around Rs 225-230 crore and that is where we should end the year at.
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