Will sustain 20% growth for year as a whole : DIC India

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Will sustain 20% growth for year as a whole : DIC India

In an interview with CNBC-TV18, PK Dutt, MD of DIC India gave his perspective on the company's business plans going forward.

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In an interview with CNBC-TV18, PK Dutt, MD, DIC India gave his perspective on the company's business plans going forward.

Below is a verbatim transcript. Also watch the accompanying video.

Q: In FY09 and FY10 you had undertaken some capital expansion plans. So the benefits of that should start showing up in your revenues. For the entire year what is the expectation in terms of what your revenues could look like?

A: If you look at the end of nine months we are around Rs 407 crore net. I think it should go around the Rs 520 crore range and the market is good. The demand is good. So we hope to maintain this growth for the year.

Q: For Q3 in specific, your revenues largely comprise of ink and will increase quite significantly on a year on year basis. What exactly do you expect to close the year with in terms of the ink segment in particular?

A: If you look at year on year for the first nine months it is about 20% growth and we should sustain that for the year as a whole.

Q: This time around there has been some pressure which is seen at an operating level despite posting good increase in your revenues. What is the kind of pressure that you are expecting on account of raw materials?

A: Raw material cost is going up and there is always a gap between the raw material cost increase and the selling price increase. So right now we are in the situation where the raw material cost is high and we have been able to pass some of it to customers.

Q: Are you looking to pass on the raised prices?

A: I guess eventually one has to because there is a limit how much we can absorb but it could be a bit of a temporary phenomenon because there has been general inflation but some items have gone up very high which is not normal. So we are just watching the situation and possibly we will take some action within the next few weeks to come.

Q: Can you throw some light on exactly how you function in terms of demand supply scenario, who are your key customers and what is the demand looking like?

A: We are suppliers to the publication and packaging so our major customers will be all major printers like newspaper houses and also all the packaging printers and obviously there are a lot of small printing presses.

Q: Do you have 100% domestic exposure or do you also export at any point?

A: It is mostly domestic. We do export to some neighbouring countries like Bangladesh but we are basically adhering to domestic because this product is service oriented. So it is necessary that you supply locally.

Q: The lamination adhesive segment is a very small part of your revenues as of now. Are you planning to scale it up and in general what is the growth drivers for the company going forward. You have any investment lined up?

A: We are setting up a new factory for that and lamination adhesive is linked to packaging so it is packaging adhesive. Its lamination for pouches for various products and we think that the growth potential is high but these are early days, we are new in this field, there are established suppliers, global players so possibly in two-three years time it should become a major business.