See 35% topline growth in FY12: Kajaria Ceramics

According to him, margins will continue to remain stable.

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Gautam Broker. Also watch the accompanying video.

Q: You have delivered a decent set of numbers, about 37% top-line growth. Are you expecting to maintain it?

A: Yes, we hope to maintain the top-line growth of 35% for the full year.

Q: What about margins?

A: Margins will continue to remain stable in spite of the forex loss that we had in the third quarter. I think we’ll have some more in the fourth quarter. But margins will remain stable for the whole year.

Q: How do you see demand panning out? We have had some problems for the real estate space and the residential housing complex itself. Doesn’t that impact demand for you?

A: When we see papers in the morning, we also feel worried. We are growing at 35% for the year and so are good other branded companies like HSIL, Jaguar, Green ply, Century Ply. They are all good large midcap companies. They are all growing at 25-35% because of very strong retail presence in the country. So, I don’t see that the demand will affect us in any way.

Q: What kind of revenue and margins do you expect in FY13?

A: We are looking at a growth of over 25% for the next two years. Our vision is that March 2014 we should look at a turnover of over Rs 2,000 crore.

Q: What about margins?

A: We should maintain the current EBITDA of anywhere between 15-16% going forward and may be a shade better because this year has been very tough on the cost front. The costs have really gone up high and in spite of that we have been able to maintain these numbers. It’s stupendous effort. We’ll try to improve the bottom-line from here on.

Q: Does very stable margin actually reflect that you have decent pricing power? Has demand held up very well or has there been any kind of slowdown?

A: The pricing power is one. Secondly, the industry is moving towards value added particularly, Kajaria Ceramics. The same product which was earlier been sold between Rs 20-40 square feet, today the range has become wider and we are selling from Rs 20-80 for ceramic tiles and from Rs 40-150 for vitrified and glaze vitrified tiles. That has added to the pricing power. Per se the pricing may not have gone up much, but because of value addition it is giving better margins.

Q: Would you have to raise any capital?

A: Currently, we are not looking at it because we have not raised any capital for the last 20 years. But going forward, we’ll see what the opportunities available are and take a call as and when it comes.

Q: How much did you have to pay by way of interest costs in the current quarter because that was fairly sharp in previous quarters?

A: Current quarter, the interest cost didn’t go up. If you see the results, our foreign exchange loss was to the extent of almost Rs 5 crore for this quarter. Going forward, in the fourth quarter, it should be around Rs 4-5 crore. But the dollar has come down from 54 in October-December quarter to almost 51 today. So, we see that next quarter that is January-March quarter we should see at a lesser forex loss. Interest cost per se has not gone up.