Any rate hike will impact cos margins by Rs 4cr: Orbit Corp

Pujit Aggarwal, Managing Director, Orbit Corporation said that the company's current debt stands at Rs 800 crore. With analysts expecting a rate hike between 25-50 basis points, he says that the net impact on interest of the compay will be Rs 4 crore at max. "In the larger scheme of things, this is certainly going to dent our margins," he tells Udayan Mukherjee, Managing Editor, CNBC-TV 18.

Below is the verbatim transcript of his interview with Mitali Mukherjee and Udayan Mukherjee of CNBC-TV18. Also watch the accompanying video. Q: First a take on whether there is the outside chance for the real estate sector to see some kind of a specified action or differential action from the RBI and its policy today?
A: The way the inflation has been growing, so it is unlikely that the RBI is going to change its tracks. So it is very clear that RBI is looking at a hike in interest rates and possibly between 25 to 50 basis points is what we are looking at. Q: What impact is it having directly and indirectly in terms of either real estate loans or housing loans, and directly to the company like yours which carry significant amount of debt?
A: As far as the company is concerned, we have a debt of about Rs 800 crore. So we have an interest outgoing of anywhere between Rs 110 to Rs 115 crore a year. Effectively, if you are looking at a 25 to 50 basis points, the net impact is going to be around Rs 4 crore at max. In larger scheme of things, it is not much. But yes, we have been impacted with almost 2 to 2.5% over the year and another 0.5% is certainly going to dent our margins. That remains to be seen.
As far as the industry is concerned, we are seeing that an interest hike in home loans; that will have a negative impact because now it has gone into double digits and if it goes beyond between 10 to 11%, still we may see some negative impact. If it goes beyond 11%, I don