Cox & Kings eyes 28-30% topline growth ahead

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Cox & Kings eyes 28-30% topline growth ahead

Peter Kerkar, executive director of Cox & Kings said the company has marked robust growth for the first quarter and it has come from the Indian business.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ News and Notices about Cox & Kings See interviews with Cox & Kings Management See what other Experts & Brokerages are saying about Cox & Kings See previous Results of Cox & Kings Cox & Kings BSE | NSE 29/05/12 Are Mutual Funds betting on Cox & Kings?

Cox & Kings has announced its first quarter results. The company's Q1FY12 consolidated total income was up 28% at Rs 157 crore versus Rs 123 crore, year-on-year, (YoY). Its net profit was up 51% at Rs 38 crore versus Rs 25 crore. Its EBITDA was up 22% at Rs 72 crore versus Rs 59 crore, while its EBITDA margins were down 46% versus 48%.

Also read: Cox & Kings Q1 cons net profit up 51% at Rs 38 crore

Speaking to CNBC-TV18's Ekta Batra, Peter Kerkar, executive director of Cox & Kings said the company has marked robust growth for the first quarter and it has come from the Indian business.

"It is our peak outbound season so it has been incredibly robust to give us a total 28% topline growth. We would be very disappointed if we did not continue to perform in the region of 28-30% topline growth going forward including the synergies of the two combined companies," added Kerkar.

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: Break-up this 28% sales growth you have seen on a consolidated basis in terms of contribution from India as well as your overseas markets?

A: We have actually shown a really robust growth for the last quarter and the growth has come from the Indian business, which is a peak season for outbound. We grew 30% over last year from Rs 79 crore to Rs 102 crore of sales and our European and the rest of the world business which includes America, Japan, Australia and New Zealand grew to Rs 54 crore which is 23% in advance of last year.

We had suppressed growth in the foreign markets primarily because of the middle-east crisis which accounts for 20% of our global sales in terms of long haul. In terms of India, it is our peak outbound season so it has been incredibly robust to give us a total 28% topline growth and hence, we are very positive going forward.

Q: Where is it that you are seeing maximum demand, is it in the leisure travel or corporate? Also how is your forex and visa processing doing?

A: The strongest demand we see is in the leisure section. It has grown tremendously in the last year. It is over 30% up year-on-year, quarter-on-quarter and basically everything is looking robust including the corporate travel.

However, the visas are directly linked to leisure because we issues visa in conjunction with every other leisure holiday. So, both forex and visa processing are depended on leisure driver so you see a 30% growth in leisure; there is commensurate growth in these divisions also.

Q: Any particular reason why the margins have contracted on a quarter-on-quarter basis and what is it that you are targeting for full year margins?

A: Our margins have not contracted. We have seen a PAT growth of 47% and consolidated. The only area where we were suppressed was on our overseas operations as Japan had a nuclear crisis in the early part of this year.

This effect has shown for the first time as we made a small loss in Japan but this was more than compensated by the rest of the world, which showed 47% growth in PAT margin over last year. Our EBITDA margins were close to 51% which is higher than last year.

Q: Give us a sense of when exactly this UK firm Holidaybreak that you acquired sometime back will start showing in terms of financials for you?

A: We should actually complete the process by September 27, which is when we will officially takeover this company. So we will see numbers coming in for the last quarter of this year. This company has been profitable even in the worst times in Europe so we are very excited about this new buy.

Q: What would FY12 and FY13 revenue growth look like accounting from these synergies from this buy?

A: Normally, we do not make future looking statements but we would be very disappointed if we did not continue to perform in the region of 28 to 30% topline growth going forward including the synergies of the two combined companies.