Q3 looks good; See reasonable volume growth: JHS Svendgaard

In an interview with CNBC-TV18, Nikhil Nanda, managing director, JHS Svendgaard talks about the latest happenings in his company and sector. For complete details watch the accompanying video.

Below is a verbatim transcript. For complete details watch the accompanying video. Q: What is the way forward for JHS Svendgaard with respect to how volume growth will pan out and whether there will be margin pressure or not?
A: To take you back a little in history, when we were actually setting up the capacity in 2008, by the time we were ready by end of 2008, the recession had set in and we were thinking probably we got it all at the wrong time. But it all turned out good for the company overall because by the time the recession was over it was 2010 and the sunset clause had set in for the tax free zones.
We were the only facility in the tax free zone during the sunset period which had this huge capacity available. As far as the order book is concerned, on terms of volume, we have a full order book which would materialize into real production in the next couple of months extending almost up to a two year period because we are a brick and motor manufacturing company. So by the time we get molds, tools, dice and fixtures into place it takes some time. But the order book is full.
As far as margins are concerned, in the last 15 years we have seen for the first time that quarter on quarter the prices of raw materials have been very volatile. It has never been like what we have seen in the last four-six quarters. However, from the current trend we see some softening happening. At the end of the quarter, as we have the arrangement with most of our customers, we would be able to pass on the price increases to our customers. We should be in a better position from next quarter onwards. Q: What you are expecting in terms of price hikes for Q2, at the end of Q2 and for the rest of the fiscal as well?
A: The arrangement that we have with most of our customers is that at the beginning of the quarter we fix the prices for the whole quarter. In case there is an increase or a reduction during the quarter that comes back to the company or goes from the company