See 10-12% volume growth in FY12: Emami

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See 10-12% volume growth in FY12: Emami

NH Bhansali, chief executive officer of Emami expects good volume growth in quarter three and four. “We expect, on a yearly basis, an overall volume growth of over 10%. We expect to end up with 10-12% volume growth in this financial year.”

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See latest News about Emami See previous management interviews See what other Experts & Brokerages are saying about Emami Emami BSE | NSE 31/05/12 Are Mutual Funds betting on Emami?

In an interview to CNBC-TV18, NH Bhansali, chief executive officer of Emami says, he expects the margins to improve in the third and fourth quarter.

He also expects good volume growth in quarter three and four. "We expect, on a yearly basis, an overall volume growth of over 10%. We expect to end up with 10-12% volume growth in this financial year."

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.

Q: How do you expect margins to continue? Will the pressure continue because of raw material?

A: No this is because of the timing differences, the costs have started increasing since more than one-and-a-half year. We have raised the prices very judiciously across all the products.

If you look at this current quarter the cost of goods sold (COGS) pressure has reduced. Going forward, in the quarter three and four, we expect the margins pressure to reduce, infact margins should improve.

Q: How much do you think they can improve by?

A: It should remain at the last year's level. In the first quarter, the margins had reduced by around 6% on COGS. Going forward, the margins are easing. So, by the end of the year, I think we would be at the same level where we were in the last year or it may increase little around 0.5%.

Q: The volume growth this time has been fairly tepid. It's just come in at about 8% which is lower than what some of the other players in the FMCG space have done. Why has it come in at 8%? Going forward, what's the outlook on volume growth?

A: In this quarter, the volume growth has been little lower because the summer didn't extend well. If you look at our product profile, we are more on seasonal. From October onwards, winter has started picking up very well. So, we expect good volume growth in quarter three and four.

Q: How much do you expect the volumes to improve to?

A: We expect, on a yearly basis, an overall volume growth of over 10%. We expect to end up with 10-12% volume growth in this financial year.

Q: What do you think you will do in terms of year-end sales? Will it be able to go up to about Rs 1,400 crore or there about? More importantly FY13, what are the kind of growth expectations you have?

A: The growth is intact. The growth in the first quarter had been good. In the third and fourth quarter, we expect good growth to come in.

Q: You had undertaken price increases almost close to about 8% in the quarter gone by. Going forward, in Q3 atleast, do you have any price increases which are lined up?

A: We do it very judiciously. So, we have done most of the price increases. Frequently we keep on reviewing rates. So, we don't expect price increase very recently. In the fourth quarter, we may increase some what. We have done most of the price increases now.

Q: You also had a Bangladesh facility which was expected to be commissioned. Could you tell us by when is that expected?

A: We expect this to commence from January. Bangladesh is doing very well. Infact we are exporting from Bangladesh also. The growth from the South Asian Association for Regional Cooperation (SAARC) countries including Bangladesh is very well.