Difficult to sustain current growth rate: MRF

He also says, rubber is one of the most volatile products and it had grown up and then stabled. Cost of other inputs is indicating an upward movement and we expect it to rise in this quarter.

Below is the edited transcript of his interview. Also watch the accompanying video.

Q: What contributed to your better performance?

A: Softening of raw materials prices largely contributed to our profitability. Our top line growth has been significant in after market and export markets.

Q: How do you see the replacement market playing out? Do you expect this demand trends to sustain?

A: Traditionally, we are a strong player in the replacement market that is the reason why we have grown in that market. In last one year we have expanded our network quite substantially in the after market and that too has contributed to this growth.

Q: You expect the run rate to be as good as 25% on revenues?

A: Last year too, we grew at this rate. It’s a wait and watch game in the coming quarter as the original equipment manufacturers (OEMs) have toned down their production numbers. We need to relook at our numbers. I don’t expect same growth in this quarter.

Q: What about export markets? Now, you have an advantage of the rupee?

A: That’s why we have increased our exports substantially. We are still net importers, so it has hit us to that extent; we have grown substantially in the ASEAN countries.

Q: Do you expect raw material prices to remain benign and of their highs or could there be inch up again?

A: Rubber is one of the most volatile products and it had grown up and then stabled. Cost of other inputs is indicating an upward movement and we expect it to rise in this quarter.

Q: A price hike is on the anvil?

A: I am not saying that. The cost is going up.

Q: Will you manage a price hike?

A: Cost is one of factor for price rise. If cost goes up significantly in this quarter, then one would have to look at prices.

Q: Will reduction in interest rate improve demand?

A: Repo rate rise has impacted sales of cars and two wheelers. Once the downward slide begins, then everybody wait for future movements. Everybody is on a wait and watch mode, that will the RBI further reduce rates? So that too can happen and therefore there could be a lag.