Hindustan Motors has seen a big jump in sales and production volumes in February even though the auto industry is going through turmoil, says Uttam Bose, MD of the company in an interview to CNBC-TV18. The company has seen improvement in growth in the past two months, he adds.
Bose says there is no issue as far as land is concerned as the company has around 400 acres in Uttarpara and around175 acres in Chennai. The company is hopeful of making profits at profit before tax (PBT) level. "We have touched positive PBT in the month of February and will continue or rather improve the trend in the upcoming month," he adds.
Below is the verbatim transcript of Uttam Bose's interview on CNBC-TV18.
Q: Can you give us an update of your business? What kind of sales is Hindustan Motors doing month after month and is there any recovery that you are seeing currently?
A: The auto industry, as on date, is going through turmoil. Nobody expected such type of fall in the growth rate. Even if we go into 2008-09 when there was a momentary hit, in the auto industry, we did not see such drop in the compound annual growth rate (CAGR). But at this point of time, there is a huge slump. It seems more of a mind set at this point in time. The customer is getting paranoid, the decisions are getting delayed. People are there to buy the vehicles but the decision making is a big question today. As far as Hindustan Motors is concerned, it is seeing growth in last two months.
In the last quarter we improved upon our performances. Quarter four, we are still improving. We are maintaining the trend. We are leveraging on the strength on the brand loyalty and the operational excellence. These two are the real factors where we are able to push up ourselves.
Q: Is there anymore land that you will monetise?
A: No, not now.
Q: Is there any time table, what is the excess land that you have?
A: We have around 400 acres in Uttarpara and around 175 acres in Chennai. But as of now, there is no question of this land issue.
Q: None of that land was transferred to Hindustan Motors Finance Corporation when you did the demerger?
A: No, not at all. Demerger proposal is on and takes its own time. Now it is with the stock exchanges, then it will be going to the High Court and will take its own time. It will definitely take around 9-12 months.
Q: You have been making operational losses for many quarters now. When will you be able to make a profit on the EBITDA line itself?
A: Not only EBITDA lines, we will make profit at the PBT level. EBITDA level profit has already been generated. Quarter four, first two months we have generated EBITDA level profit as a company. Now it is a question of getting into PBT level. PBT level, we have touched positive PBT in the month of February and will continue or rather improve the trend in the upcoming month.