Revised product mix will improve margins: Riddhi Siddhi

Riddhi Siddhi has come out with fourth quarter results. The company has reported net profit of Rs 9.4 crore (Rs 94 million) in Q4 of FY07 as against Rs 4 crore (Rs 40 million) in corresponding quarter of previous year.

Ganpatraj Chowdhary, MD, Riddhi Siddhi Gluco Biols Ltd, has said that their margins will improve, going forward, due to improvement in product mix. Their OPMs were at 15.2% vs 13.61%.

Excerpts from CNBC-TV18's exclusive interview with Ganpatraj Chowdhary:

Q: What are the margins clocked in this quarter and are they maintainable? What is the guidance for FY08?

A: The total sales have gone up to Rs 355 crore against Rs 243 crore last year. There’s been an overall growth of 46% in FY07. Our profits have increased to Rs 25.54 crore from 10.54 crore last year. That is a growth of 150%. We are confident of maintaining this kind of profit in the coming year also.

Q: What were your OPMs for FY07?

A: In FY08, our EBITDA margins improved 15.27%, which is 166 bps improvement compared to last year’s 13.61%.

Q: What’s the total capacity as of now and are you looking to raise anymore?

A: We are in the process of completing our Rs 110 crore investment in the state of Uttaranchal and on completion of that our total capacity will go to 5 lakh tonne per annum.

Q: Are the margins sustainable at 15.5% for FY08, or you will be able to enhance them?

A: We have able to improve our product mix and we are focusing more on value additions. And our relationship with Roquette Freres of France and lots of support in yield improvement and utility consumption, are also the reasons. Hence, we are confident of maintaining these numbers and infact, will try and improve further, taking it up to 16% and more.