Acquisition, education foray boost quarter for Cox & Kings

Below is an edited transcript of the interview on CNBC-TV18.

Q: Your total income went up by about 22% and margins have improved. What went right in the quarter?

A: It has been a very exciting quarter for us. This is the first quarter that we have fully consolidated our income with Holidaybreak, the company that we acquired in 2011. Our net revenues are up by 230% this year to Rs 532 crore as compared to Rs 197 crore last year.

So, there has been a huge increase in our revenues and our PAT this year is almost up 200% over last year. I think that our acquisition has really proved fruitful because it is a very profitable company with very strong cash flows.

Q: The finance costs obviously are still a load on the entire entity. Do you think it will stabilise at Rs 28 crore?  Would that be the finance cost that could be expected every quarter?

A: We have taken some drastic steps to tackle debt. One of them is the inking of a private equity deal which is non-dilutive to Cox & Kings shareholders. This will bring in approximately USD 140 million into the company which will primarily be used to pay off debt.

Q: Is there anything else that you are planning to further reduce debt?

A: We have always maintained that the purchase of Holidaybreak was a significant acquisition for us. Holidaybreak's strong and proven cash flow over the last four-to-five years in spite of a challenging economic environment helped us post some exceptional results for this quarter. We believe that the next quarter is also full of promise.

We also believe that with our current structure, the accruals and the cash being thrown out of both the businesses, we should be able to effectively reduce the debt over time. We also have some very good long-term debt. So, there is no pressure on the company in the immediate future because we have created a cash pool and paid down over the next seven years. So, I think we have put ourselves in a very strong position.