To raise funds will take QIP route: Kavveri Telecom

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

Kavveri Telecom has reported its first quarter results of FY12. The company did a net profit of Rs 8.3 crore in the first quarter of FY12 and a growth of 63% over Rs 5.1 crore in the same quarter last year. The company's net sales jumped 127% to Rs 80.6 crore from Rs 35.5 crore on year-on-year (YoY) basis.

C Shiva Kumar Reddy, managing director of Kavveri Telecom, in an interview with CNBC-TV18's Latha Venkatesh and Gautam Broker, gave his perspective of the first quarter performance and divulged future plans.

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

Q: Can you take us through the numbers? There seems to be a doubling of profit.

A: This quarter has been very good for Kavveri Telecom. We have done Rs 80.57 crore on the topline compared to Rs 35.47 crore last year same quarter, which is a 127% increase on topline and bottomline. We have had a net profit of Rs 8.37 crore compared to Rs 5.07 crore last year same quarter and an increase of 65% over the same quarter last year.

Q: What explains this dramatic rise in revenues YoY? How would it look quarter-on-quarter (QoQ) if you were to compare it to the January-March quarter last year?

A: In January-March quarter, we have done about Rs 75 crore revenues and about Rs 6 crore revenues in bottomline. On the sequential basis, we have grown about 5% on the topline and about 30% on the bottomline.

Q: Last time, you had indicated a 30% topline growth and bottomline growth as well. Your Q1 numbers clearly have beaten that. Would you like to up your guidance? Is this a seasonally strong quarter which is why you have been able to achieve this growth?

A: We don't give guidance. Earlier, we have been achieving more than 30% growth on topline as well as bottomline, which should continue this year. We have been looking at bettering that.

Q: The EBITDA margins have also declined to about 20% versus 28%. What is the reason for the margin decline?

A: The EBITDA margins have declines only this quarter because of the product mix. If you look at the whole year, we will maintain the same EBITDA margins. Last year, we signed a global procurement agreement with one of the telecom OEMs. We started building from this quarter. We also had about Rs 15 crore of exports to Europe region this quarter. These two things are very well for the company for the future.

Q: On a consolidated basis last year, did your revenues grow by 25%?

A: Revenues grew by 28%.

Q: Will this be an improvement?

A: Yes definitely. FY12 will do better. This quarter on a consolidated basis, we have done about Rs 90.79 crore on topline and on the bottomline, we have done about Rs 10 crore.

Q: You were looking to raise some money. In your June board meeting, you indicated that you will be raising additional funds by issuing a Qualified Institutional Placement (QIP) or an Foreign Currency Convertible Bond (FCCB). Is there any progress on that?

A: Yes. On the July 4, the shareholders approved company's plan to go ahead for QIP up to Rs 75 crore. We have appointed ENAM Securities as advisors for this activity.

Q: When would you tap the market? What kind of an instrument you are likely to use?

A: It will be QIP.

Q: Should we expect it in this quarter?

A: I am not very sure. I don't want to comment on things which we are not sure.