Focussing mainly on flower biz: Karuturi Networks

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KS Ramakrishna, MD at Karuturi Networks says flower business is the largest part of their business.

Last year, in a topline of Rs 45 crore, Rs 38 crore came from its horticulture business.

The domestic sales from India, says Ramakrishna, is about 25% of production, whereas of Ethiopia is roughly about 7%, he further adds.

Excerpts from CNBC-TV18's exclusive interview with KS Ramakrishna:

Q: Could you just breakdown your three businesses for us and tell us exactly how much revenue you generate from each of these three businesses: horticulture, ISP and project services?

A: Flower business is the largest part of our business. In last year's topline of Rs 45 crore, we have Rs 38 crore coming from the horticulture business, which is largely the flower business. Then we have the internet service where we have close to about USD 22 million and the project services are USD 23 million.

Q: Could you break up your sales between domestic and exports?

A: We have operations in Africa and India. The domestic sales from India is about 25% of production, whereas of Ethiopia is roughly about 7%.

Q: In terms of margins your horticulture business makes a substantial amount as you pointed out but on your EBITDA margins you do about 40%. Your ISP makes up about 5.5% of your revenues but the margins are substantially better close to about 53%. Is that a case for changing the revenue mix going forward or whether a thrust keeps coming from the horticulture segment?

A: We don't see any future expansion possibilityon the ISP side because we are too small on a Pan-India basis.

We are mainly concentrating our energies on the flower business, which is more scalable, and there is a huge market out there in Continental Europe and Japan. We see a YoY demand growth as well.

Q: Would there be a case of phasing out this business over a period of time, if you are going for a thrust on horticulture and as you said entire revenue is coming from there? Would there be a case to demerge some of these businesses going forward?

A: We are not looking at demerger. But at the right time with the correct opportunity, we might exit of the ISP business, if we have the right valuations.

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