Will cross Rs 1400cr in revenue this yr: McLeod Russel

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Will cross Rs 1400cr in revenue this yr: McLeod Russel

In an interview with CNBC-TV18, Aditya Khaitan, the managing director of McLeod Russel talks about the latest happenings in his company and sector. He also outlines the company’s growth strategy for the rest of the year.

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In an interview with CNBC-TV18, Aditya Khaitan, the managing director of McLeod Russel talks about the latest happenings in his company and sector. He also outlines the company's growth strategy for the rest of the year.

Below is an edited transcript. Watch the accompanying video for more.

Q: Has there been any issue with respect to Iran? Did that hurt you in the last quarter? What's the plan in the last quarter with respect to the second half?

A: Iran is a country that buys orthodox teas and as a company we only do a miniscule amount there. Today the market being down at EMO market factor as a company we are doing very well. Our second quarter results were better than last year. Going into the year we expect our third quarter to be even better. We have had increase in production over last year and our prices to date also are higher than last year. Putting everything together we are expecting a strong year-end also.

Q: Given that you are seeing excess supply in North India are we likely to see some dip in realisations?

A: I sense that people had seen a jump in production until October but the winter is setting in early up in North India and Northeast India and we are expecting a drop in November and December compared to last year. Also going into the year the total overall production has been higher by around 30-35 million but that is really the amount that India requires on a yearly basis to meet its consumption growth.

We started the year with 120 million kilograms of shortage in the pipeline. Inspite of the increase in production, the overall prices this year are higher than last year which really goes to prove that consumption is really strong and is outstripping supply.

Q: What did your margin picture look like this quarter?

A: The third quarter is really where our sales come in. The second quarter is where you see our stock being higher which gets liquidated into the third quarter. Overall, we are expecting a 5-7% increase in prices over last year. We being a fixed cost industry, any increase in production really helps us in offsetting our costs. So whatever increase in cost this year would be offset by the increase in our production and whatever is the increase in our selling price this year should really go down to the bottomline.

Q: What would FY12 look like by way of revenues?

A: We should be able to hit about Rs 1,200 crore in India and about another Rs 250 crore overseas. If you consolidate McLeod Russel with India and overseas we should hit a production in excess of 100 million this year which would be a record for us and we should be hitting a turnover of around Rs 1,400 crore.