Q2 sales growth will be better than Q1: GNFC

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Q2 sales growth will be better than Q1: GNFC

In an interview to CNBC-TV18, KC Jatania, ED and CFO of GNFC said, in the second quarter, sales growth will be better than the first quarter. “In the first quarter, we had a one month shutdown. It was a planned shutdown. In the second quarter that is not there. So, compared to the first quarter performance is better.”

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about GNFC See previous management interviews See what other Experts & Brokerages are saying about GNFC GNFC BSE | NSE 28/05/12 Are Mutual Funds betting on GNFC?

In an interview to CNBC-TV18, KC Jatania, ED and CFO of GNFC said, in the second quarter, sales growth will be better than the first quarter. "In the first quarter, we had a one month shutdown. It was a planned shutdown. In the second quarter that is not there. So, compared to the first quarter performance is better."

Below is the edited transcript of his interview with Latha Venkatesh and Gautam Broker. Also watch the accompanying video.

Q: You had a decent performance in terms of sales in the first quarter, especially compared to the year ago level. Would you expect that the second quarter numbers will also match up, Rs 650-700 crore in terms of sales?

A: In the second quarter, the company has been doing very well. The production is good. Whatever we have produced, we are able to sell. So, this quarter will be good. In the second quarter, sales growth will be better than the first quarter because in the first quarter we had a one month shutdown. It was a planned shutdown. In the second quarter that is not there. So, compared to the first quarter performance is better.

Q: What's the update with regards to the phase two expansion plan that you had, setting up of a TDI plant? Is it on track and likely to be completed by next quarter?

A: We have about four projects. And we will be completing in this year.

Q: How are EBITDA margins looking like? Raw material costs have held up quite steady. Do you feel that operating margins could dip a bit because of the rising input costs?

A: We cannot predict margins right now.

Q: Is the flow of gas from Reliance KG basin coming in constant terms? Is there any disruption in the supply or reduction? How much of your gas requirement does it meet?

A: There is some reduction in supply of gas from KG-D6 Reliance. And to that extent we have to source some more gas from our LNG.

Q: And in that case would your margins in the second quarter be lower than your margins in the first quarter? I think you reported operating margins of 14.3% in the first quarter. Will there be pressure? Will you report lower margins in the second quarter?

A: No, we don't foresee pressure on the margin because of this. But, yes, it is affecting somewhere, but not in a significant way.

Q: Anything that you heard from the government on the urea decontrol at all?

A: The urea decontrol issue in procession, government is not yet through. It is going from one minister to another. The final decision is yet to come, but we hope that it will go through. It's only a process that is taking.