Ravi Kumar Distilleries confident of better volumes in 2011

He said, "We will be acquiring it in full during this year and we are expanding the plant to 100 KL per day with 60,000 cases of Indian made foreign liquor (IMFL) a month and it will be also producing power of 4.5 megawatt (MW)."

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

Q:  Can you give us an update on how much exactly did you shell out for this 51% stake? What sort of operational synergies can we expect?

A: This is a distillery in Karnataka with the capacity of 40 KL per day. We have taken a 51% stake in this company. We will be acquiring it in full during this year and we are expanding the plant to 100 KL per day with 60,000 cases of Indian made foreign liquor (IMFL) a month and it will be also producing power of 4.5 megawatt (MW).

Q: How much have you shelled out for this 51% stake and if you could just throw some light on the financials of the company, is it profit making?

A: Yes, it is a profit making company. But, I will not be able to give you the numbers right now. The total outlay is Rs 86 crore.

Q: Do you already have Rs 86 crore as cash with you or will you need to raise some money?

A: No, outlay in this project is Rs 86 crore, which will be partly funded by our equity and partly by loan from bank.

Q: What will this do to your FY12 revenue outlook and also more importantly could you tell us about your margins because that has been in very low single digits and when you came out with your IPO, you have spoken about increasing your margins, could you tell us how your operating margins profile will be panning out from hereon?

A: Yes, definitely it will be improving upon because, when we came out with an IPO, our operations got very strategic and cost effective.

Q: What would your margins be?

A: It should go up by 8%.

Q: Can you give us an update on how exactly volumes are doing for you at this point in time?

A: Yes, we have done around 7,50,000 cases during the last year with a turnover of around Rs 110 crore with a growth of around 15% over last year. We look forward to increase our volume as planned in our projections. It should be around 9 lakh cases this coming year.

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