Monsoon causes Texmo Pipes to revise rev target to Rs 150cr

Sanjay Dalal CFO of the firm, in an interview on CNBC-TV18 spoke about the results and the outlook for his company going forward.

Below is a verbatim transcript of his interview with CNBC-TV18's Reema Tendulkar and Ekta Batra. Also watch the accompanying video.

Q: Good set of numbers, you recorded a growth of about 50% in your revenues, is that sustainable for the entire year?

A: If you look at last year, in the same quarter, the sales were close to Rs 14 crore. We have increased it to Rs 21.45 crore so it’s more than 50% growth and the turnover that we had achieved in the entire last financial year we have already crossed it in the month of October and this is the main season for the industry. In the January quarter, we expect that we will continue with the same momentum and we will maintain the same growth for the entire financial year also.

Q: On a sequential basis your revenues have actually fallen to Rs 21 crore versus Rs 38 crore. Is there a bit of seasonality which comes into play - could you just explain the sequential drop in revenues?

A: If you see the quarter ending June 30, sales were at Rs 38 crore and now its close Rs 21.45 crore, you cannot call this exactly a drop in sales because the September quarter is the monsoon period and there is a lull across the industry. This is not a fall in sales although we have improved our sales comparing it to the last quarter and now the October – December quarter, once again, you will see a rise in sales and there will be growth.

Q: On the other hand comparatively, your margins have expanded quite significantly on a sequential basis and on a YoY basis. What led to this expansion and what is the sustainable level you see going forward for the year?

A: Margins have improved because of the expansions that we are coming in with. The company has already started the production of drip irrigation which we had promised during the IPO which is a better margin product. Also, the company’s dealer network is rising and the company is focusing more towards different sectors of the industry. All these things have collectively helped the company in improving margin.

Q: So what would your margins look like by the end of the year?

A: By the end of the year, we expect to improve because our fittings will also come out in 10-15 days and that will also help in improving but we are quite sure that we will not go below this level.

Q: You already indicated that all the expansion plans are set to commence from the 1st week of October and you had indicated that you are planning to do revenues of around Rs 170 crore for the entire year. Is that still doable?

A: Maybe. We may not get close to Rs 160 crore what we had planned but still the target is close to Rs 140-150 crore and we have revised the target only due to the reason that there has been rain in the last few days and this has slightly dampened the chances of improved sales.