Post Earning - Interview - Q3 2022-23
Transcript of the Interview given by Mr. R G Chandramogan, Chairman of the Company to CNBC TV18 on 20th January, 2023, a day after the Meeting of the Board of Directors held on 19th January, 2023
Duration CNBC TV18 Mr. R G Chandramogan
Slot 1 To chat with us. Hatsun Agro has Actually our EBITDA has increased delivered a mixed wagon Q3 the compared to last year. Actually last
Company’s margins witnessed an year same time we did 162 versus expansion on a earlier basis even as it 191 this year. Taxation is sorry contracted sequentially. R G depreciation and interest has been
Chandramogan, the Chairman of higher compared to last year that has
Hatsun Agro Product now joins us on resulted in one crore less profit on the show now. Afternoon sir and the PAT. Going forward, the last thanks so much for joining in. We three years we have done a lot of were just telling our viewers your infrastructure investments and we margin performance. Could you give also had a dip of milk procurement us an indication about the pulls and due to incessant rains and lumpy pushes on the margins in the skin disease. So these are becoming subsequent quarters what should we past. Going forward we expect expect? things to improve and again the season for ice cream and curd will be better that is our expectation.
Slot 2 Margin range sir for us to work with Procurement price has gone up by and how much of milk procurement almost 16 percent compared to last price has gone up? year to this year and the increase of selling price took place in stages compared to inflation that hit but now inflation is moderating and probably we are not expecting any price increase and inflation and the price is also accommodated to.
Slot 3 Okay. Mr. Chandramogan, two part FY 24, we expect a good growth question here. First when you talk because probably the stability has about price increases that you have come now. Stability once and it taken in phases so far how much of a comes probably the things will start price hike has been done by the improving. We expect probably the
Company in nine months and have products also to play a major role you seen an impact on volumes of like ice cream and curd because demand because of that ah sir going seasonality factor has been heavily affected in last six months due to forward do you expect recovery or heavy rain and normalcy is coming better growth in FY 24? back so we expect things to improve from this quarter.
Slot 4 Okay. So when you are talking about No. Price increase will also improvement but can you tell us if definitely will add to it and apart volume saw decline on a quarter on from price increase we should be quarter basis or on a yy basis because able to get a marginally better of the price increases? perfect. But it is too early to predict because we are only the month of
January but things are looking progressive.
Slot 5 What is a volume growth in Q3? Q3 we already had an EBITDA of 11 point
Slot 6 No sir. Volumes. Volumes. Volumes actually didn’t increase a lot because the price increase has taken place. Now price increase has to stabilize and the volume increase will happen only this quarter as well as the next quarter.
Slot 7 Did volumes decline? Did volumes No no. Milk volumes have come come down? If yes, by how much year down by about 4 to 5 percent. But on year and quarter on quarter? this is not occuring this quarter and the ice cream volumes and other things have already grown.
Slot 8 Okay. All right. So you have also Actually capex we have done approved fund raise through Rights sizably well in the last three years.
Issue and QIP this time around the So last three years once when covid quarter gone by uh by when do you was there, our project cost think you’ll complete it uh what kind implementation were comparatively of uh usage will you see because of the less and we were able to do it faster. funds that you have been raising will Now we don’t require capex it be capex debt reduction uh can you infrastructure. This is mainly for tell us more details on this? debt reduction and our 300 Crores has been raised and our debt equity ratio will already fall to less than 1:1, from tomorrow, most probably the funds will be available from tomorrow.
Slot 9 Okay So we have not gone for QIP and we are settled with Rights Issue and it is already done.
Slot 10 Okay. So all of the money raised by Ice cream probably there are two the Rights Issue will go to bring your brands and probably, every year debt with debt to equity below 1x and probably the brand contributes, not for capex because your capex immediately I don’t have the figures plans have largely been completed. to say. But probably it is just
So how much did ice creams increasing. contribute to your overall revenues and do you have a target because earlier you have indicated mid-teens kind of revenue contribution.
Slot 11 Okay. So you are taking about capex Right. It will change the margin as that you have already announced and well as revenue. Both. But probably you do have couple of plants which it is to early to say recent milk will start commencement of arrivals has improved because after production as well and they will start the rain, milk arrivals have started contributing so to say from FY 24 as improving. It is too early to predict. well. How much of a total addition But the next year probably we can will you see to revenues? Will it expect something like 14 to 15% change your margin profile as well in growth without any difficulty. any way?
Slot 12 Okay. 14 to 15% growth without any Normally advertisement we spent difficulty and when you are talking about 2 percent of the revenue and it about growth will you be spending will be more as a percentage for ice more on advertisement as well? You cream and probably less as a did see a decline this time around that percentage for milk. So overall we is something that led to improvement normally spend about 2 percent. in margins as well. What is the range that you can work with?
Slot 13 How is competition? You know lot of We are we are mainly focused with d2c brands which have opened up. dairy fat ice cream and we don’t
Peoples who have brands which are even just go for vegetable fat ice selling vegan ice cream low calorie cream and all that. Vegan and all ice cream. Could you give us the that is very limited market and sense of the competitive intensity in limited niche and we are focused on the market? dairy fat ice cream.
Slot 14 All right Mr. Chandramogan it was a pleasure speaking with you sir. Thank you so much for joining us and taking us through quarters through performance and the after going forward as well that’s the word coming in from Hatsun Agro Product the stock has recovered a tad bit from the lows but still down one and half percent in trade right now.