Festive season might be decent: Provogue

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Festive season might be decent: Provogue

In an interview to CNBC-TV18, Nikhil Chaturvedi, managing director of Provogue said, the festive season might be decent. “September did worry us a lot. But if I see the first weekend of October, it does give us hope that the season might be decent.”

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Provogue See previous management interviews See what other Experts & Brokerages are saying about Provogue Provogue BSE | NSE 29/05/12 Are Mutual Funds betting on Provogue?

Q: Exchange data also shows that you have pledged in entire stake in Provogue of about 9.5%. What was the primary driving factor behind pledging your entire stake?

A: I have pledged my entire stake because I am buying more of my own equity. I don't think I can get it back at this price again. Hence, I have pledged my shares to buy more shares. That is exactly what I am doing currently and that's why I made that announcement.

Q: What is your total holding and total promoter holding in the company?

A: The promoter holding in the company was 43%. We have already taken it up to 45.5%. We would be buying all the way till whatever we are allowed.

Q: How much is pledged?

A: Only my personal shares are pledged.

Q: That would constitute how much?

A: It would be 5-6%. There are some pledges which are for the company purposes, they have nothing to do with personal work.

Q: Can you give us an idea of plans you have for Prozone as well?

A: At the moment, Aurangabad is showing reasonably good results, we are happy with the results. We didn't have the multiplex which was functional. We expect to be functional with the multiplex this week. And that should also show huge amount of traction.

Our projects at Coimbatore, we are at the final stages of permission. We should be in a position to start construction activity. We are launching two projects for residential this year; one is in Indore and other in Coimbatore. So, you will start seeing cash flows in Coimbatore. The company does have cash. But at the same time residential would be a strong driver for us. We expect to get all our permissions through for Aurangabad commercial offices. We expect to start construction within a month or so.

Q: Last time, the lagged effect of product price hike came in and supported your margins. Do you expect margins to hold? Also, on the interest cost front, what is your plan to pare down debt because that's been hitting the bottom-line?

A: We are working on both folds. One, at the Provogue's front, we have been looking at new areas for growth and we have been investing on that also. So, we have new e-commerce and m-commerce strategy in place on which we have been working a lot. And that is new investments which we are doing in the company.

As far as the interest cost goes, the interest cost across the board for the entire country has grown up. It is not something specific to us. Basically the interest cost in the last one year has gone up by almost 300-350 bps. So, the only way you can do it is by reducing your inventory, making sure that the costs don't kill you. But otherwise it is inline with whatever the industry must be facing.