Foresee 25% revenue growth in FY12: Gabriel India

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Foresee 25% revenue growth in FY12: Gabriel India

Stock of the leading manufacturer of ride control products spurted 10% in Monday’s trade. Arvind Walia, managing director of Gabriel India, in an exclusive interview with CNBC-TV18’s Sonia Shenoy and Ekta Batra said that the company hopes to maintain FY-12 EBITDA margins at 11% and a revenue growth of 25% going ahead.

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Gabriel India announced its fourth quarter results on Monday. The company's profit after tax (PAT) jumped 2.9 times (YoY) at Rs 25 crore versus Rs 6 crore in the same period last year. During the quarter, its EBITDA rose 1.4 times (YoY) at Rs 38 core as against Rs 16 crore last year. The company's operating profit margins stood at 13.5% versus 8.3% on a year-on-year basis.

Shared of the leading manufacturer of ride control products spurted 10% in Monday's trade. Arvind Walia, managing director of Gabriel India, in an exclusive interview with CNBC-TV18's Sonia Shenoy and Ekta Batra said that the company hopes to maintain FY-12 EBITDA margins at 11% and a revenue growth of 25% going ahead.

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

Q: Tell us about this quarter's performance? The company's PAT has tripled at Rs 25 crore and total income has jumped 50% at Rs 280 crore on a year-on-year basis, how have you done on sequential basis? What do the next couple of quarters look like?

A: Yes, we had a reasonably satisfactory year. The shares strengthened 40% and the net profit after tax (PAT) doubled as we could conclude all the on going discussions with the customers and price increases. Last year, the material cost grew significantly and a series of discussions were followed with customers to utilize the price hike. We reached to a conclusion in the last quarter, thus, boosting substantial top-line growth. 

Q: What kind of growth are you targeting in FY12?

A: Repeating the 40% growth, which was achieved in this quarter, in the current market trend is difficult. However, growth around 22- 25% is likely. Meanwhile, considering the back orders, we would be growing ahead of the market.

Q: Can you give us an update on when the company will start to supplying to Volkswagen in FY12?

A: Yes, the supply would start in the month of June.

Q: How much contribution to revenues is expected from Volkswagen?

A: We would be supplying to their entire departments of Polo and Vento. If the supply is good, maybe around 1000 vehicles sales a day.

Q: How does the margin picture look like? The price hikes have managed to bump up margins this quarter at 13.5% OPM-Do you think stabilizing at these levels would be manageable?

A: It's difficult to forecast as maintaining margins in this industry is tough. However, there is continuous focus on improving margins. EBITDA margin, which is currently at 10%, would probably grow at 11% or so going ahead.