Suffered forex losses of about Rs 12cr: Rain Commodities

Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Rain Commodities has announced its first quarter results. The company's Q1 net sales were up at Rs 1049.3 crore versus Rs 810 crore.

T Srinivasa Rao, VP - Finance, Rain Commodities, said the company's interest costs were on the higher side because of reinstatement of its foreign currency loans. "We have provided for exchange losses of about Rs 12 crore. Because of that, the PAT is on the lower side," he said.

Here is a verbatim transcript of T Srinivasa Rao's exclusive interview on CNBC-TV18. Also watch the accompanying video.

Q: Could you take us through how the quarter panned out? Interest costs I think were an important factor, which affected margins?

A: We have declared the results yesterday and we have reported revenues of about Rs 1,049 crore, EBITDA of Rs 126 crore, PBT of Rs 116 crore and PAT of Rs 87 crore.

As you have mentioned, the interest costs are on the higher side because of reinstatement of our foreign currency loans. We have provided for exchange losses of about Rs 12 crore. Because of that, the PAT is on the lower side.

Q: How much did raw material cost increases impact your margins? Could you take us through your margin picture?

A: Our margins have reduced slightly by about 2%. Our revenues have increased by about 30% and EBITDA has increased only by about 17%. Since we are carrying certain high cost inventories, what we purchased in the December 2008 quarter got consumed in March 2009 quarter. Because of that, the margins have gotten reduced slightly by about 2%.

Q: Could you throw some light on the 12% stake you have in Petro Coke Industries. They had plans to set up the CPC (Calcined Petroleum Coke) plant. When is the commercial production expected? Also, there are some concerns. You have a whole host of new capacities coming in and we are seeing a little bit of softening in terms of demand. What is your outlook on that?

A: Actually we only have a minority stake in that company. We hold about 11.5% stake in the company. We invested about Rs 25 crore four years back as an entry into the international market. But post acquisition of our CII carbon, which we acquired in 2007, this continues to be a minority interest. This company has carried out trial production in the last year. In the current year, commercial production is expected. But new capacity of 350,000 tonnes is getting added through this new plant. A lot of capacity expansion and new aluminium plants are also coming in the Middle East region.

Q: So how do you expect your revenues to pan out in the current year in FY10?

A: We are expecting to maintain similar revenues for the year as a whole at the same level that we declared for the current quarter.