For the last ten years, the company has given guidance and maintained it. But this year, TTK Prestige's TT Jagannathan finds it difficult to predict. Depending upon the power situation in the south, the economy, the growth, he feels the company should be able to achieve around 10-15 percent.
TTK Prestige chairman TT Jagannathan says he is unable to predict how the year will pan out. Over the past 10 years, the company has given guidance and maintained it. But this year, it's a different scene altogether. Depending upon the power situation in the south and economy, the company should be able to achieve 10-15 percent growth, says Jagannathan.
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In non-south market, the company is growing at 40 percent, down from about 50 percent earlier, he says. The markets are still sluggish in south India, he adds. Tamil Nadu has reintroduced load shedding and power cuts and the markets have not yet recovered in the south.
Below is the verbatim transcript of TT Jagannathan's interview on CNBC-TV18
Q: You did recently make some comments indicating that there was some recovery but the hope has now shifted from Q2 to Q3, how is the demand situation especially in South India shaping up and which is your largest market as you have been challenged for a while now?
A: Unfortunately, the markets are still sluggish in South India. Tamil Nadu has reintroduced load shedding and power cut and markets have not recovered yet in south.
Q: We did get an earlier than expected and rather strong monsoon, has it helped in improving the demand outlook?
A: The south has had severe drought for two years, this monsoon the crop has to come in before you see any recovery that would be December-January.
Q: The weakness that we have seen in the south market, non-south sales have increased a fair bit, how had sales panned out in the non-southern markets?
A: Non-south markets are growing quite nicely but even that is starting to slowdown.
Q: You referred to some slowdown, by slowdown in the non-south markets can you quantify how much has growth come off?
A: We were growing at 50 percent, we are now growing at about 40 percent in the non-south.
Q: In the last interaction you had indicated that margins get adversely affected by the depreciating rupee, this quarter the rupee has been hitting all-time lows, so how much of an impact could we see with regard to the hit on the margins?
A: There will be pressure but it will not be very large, probably 30-40 bps.
Q: We did see some mild recovery in your receivables position, that was in Q1, has any recovery with regard to the debtor days in Q2, can we see that coming?
A: Yes, it has improved. We brought it down from 59 days where it was back to 52 days.
Q: Coming back on the point of rupee depreciation, any price hikes that the company will undertake to offset the negative impact on account of rupee depreciation?
A: With our pressure cookers and cookers which is aluminum dependent; while the rupee weakened, aluminum prices dropped. So the overall impact is not large but in our appliances, which we import from China, we have taken price increases.
Q: Could you help us with any kind of guidance for FY14, how has it shaped up so far, what are you expecting in the remaining part of this fiscal year?
A: Honestly, I am not able to predict this year. For the last ten years, we have given guidance and maintained our guidance. This year, I am not able to predict, depending upon the power situation in the south, the economy, the growth depends on so many things. I believe we should achieve around 10-15 percent for sure.