Aiming another 12-15% growth current fiscal: Mandhana

A: It is certainly an advantage; basically the political uncertainties in Bangladesh and rising cost in China have been a concern for our clients for sometime now. The generalized system of preferences (GSP) benefit and the tax benefit to EU and imports from Bangladesh is however a big lure that makes them continue with sourcing from there. However, India has offered a stable and consistent supply and is now able to match even a better.

In some cases the Chinese prices are dearer than India. As manufacturers of textiles and apparels we are extremely upbeat that our constant innovation and products will keep our clients excited about India. Let us not forget we make one of the finest cottons in the world and as far as quality is concerned we are way above the rest.

Mangalam: The increasing exports how does that augur for Mandhana Industries? Can you give us some numbers into an incremental benefit from that?

A: We have made a little shift in our business strategy. We used to be a very high value products exporters earlier working with most of the high street brands across the globe. However, off late we have shifted our strategies and gears and we are working more on economies of scale. We are not concentrating our efforts with the limited client base on a higher minimum order quantities. Earlier our average realisations per piece used to be some where at USD 8-9 a garment. Now it has gone down to about USD 7.50-8 which is still healthier compared to the global competition that is concern.

Also if you look at general Indian exports the average prices is somewhere around USD 5-6 we are still trading higher on that. It is definitely advantage going forward because India is a huge producers of textile and apparels historically and any kind of unrest in the neighboring countries would give a strong strategic advantage to us. As far as we are concerned our focus more is on apparel manufacturing, as far as textile is concerned we have already done our expansions recently and going forward our focus is going to be more increasing our apparel exports and also our retail presence in India.

Reema: How is this quarter shaped up for Mandhana Industries, so far your average growth rate would be close to about 12 percent? Would it be higher in this quarter and also more importantly if you could help us with how the raw material cost have trended in this quarter? Would it be lower compared to say a year ago?

A: Yes, certainly the cotton prices have dipped and it is kind of bought the raw material cost down which is definitely going to be advantageous in terms of profitability at the end of the day. All in all we are looking at a growth of another 12-15 percent this current fiscal.

The last quarter of the year is always the most robust and the best quarter for textile and apparel industry. Because India is predominantly stronger in the summer season and all the shipments of summer leave between September to March, I would say October to March. This quarter is obviously much robust then the previous quarters.

Mangalam: You are focused on growing the apparel business. I understand Being Human is contributing a large proportion to your revenue. Earlier you had also indicated about the de-merger so any update on that?A: Basically we have applied for the de-merger and we are forming a new company called Mandhana Retail Ventures which will carry out all kinds of retail businesses and activities. The whole idea to do this de-merger was more focus and concentration on the retail business because it is pretty different from manufacturing psyche and retail requires different skill set, different mindsets. We are quite bullish on our retail business because as a brand Being Human we have grown exponentially in the last two years and for the next three years we are looking at our compounded annual growth rate of almost 40 percent year-on-year. We know that India is a huge consumer market and that is the area we need to tap. We have all the expertise, as a manufacturing company working for the best brand across the globe so we want to put in all our expertise, experience and advantages that we have as an organistaion into our retail business in some way or other. The retail business will certainly grow at a pace of 40 percent to 50 percent year-on-year.