Expect 15% revenue growth in FY17: Sharda Cropchem

In an interview to CNBC-TV18, RV Bubna, CMD of Sharda Cropchem spoke about the latest happenings in his company and sector.Below is the transcript of RV Bubna’s interview to Nigel D’souza and Sumaira Abidi on CNBC-TV18.Nigel: Your stock has done so well. Plenty of interest in the company as well as the stock price does indicate. Tell us what are the current registration status currently. How many products have you got registration for? The last time we spoke, it was at around Rs 1,900 if I am not mistaken.A: I have the figures of September 30 and the figure is Rs 1,936 and we had around 800 odd registrations in the pipeline. We have received some more registrations in the last 2.5 months, but I do not have the count ready in my hand.Nigel: Could it 200-300, what could be out of this 800 that are pending?A: In this quarter, it could be in the range of 50-70 now.Sumaira: Going ahead now, when you spoke to us post your Q2 numbers, you had said that you expect a topline growth of about 15 percent going ahead. But in Q2 itself, you have done just about 4 percent. What are the plans for the second half of the fiscal?A: I expect in the range of 15 percent.Nigel: You are sticking to that growth, but how are you going to do that because Q2 was only around 4 percent. So, you are expecting Q3 and Q4 to be exemplary?A: Not Q3. If you see the background of our company, Q4 is the most crucial quarter for us and we did very well in Q4 last year. And we are hopeful to more or less repeat that performance this Q4.Nigel: As of the half year mark, Q1 you did around 14 percent in terms of a topline growth. Q2, you did at around 4 percent. So, you have done around 9 percent virtually for the first half of the year. Are you saying that Q3 also is not going to be that great? You expect Q4 to do what 20, 25, 30 percent? What is it?A: I do not have the figure with me, but we have kept pace with the first two quarters as compared to the previous first two quarters in 2015.Nigel: So you will do 15 percent growth?A: Ours is a seasonal business so, Q1 of the calendar year and Q4 of the fiscal year is the most important. And then it goes in the same order. Q1 of the fiscal year is good. Q2 is little less and Q3 is the least.Sumaira: In terms of your import and export market, are you still importing entirely from China? Any change going ahead? And also, Europe currently contributes over 50 percent to your revenues. Is there any change in your revenue mix?A: No, it will continue to be the same. We will continue to import from China and Europe is still the most important region of our business.Nigel: You are bringing a lot of products from China. The currency is moving around over there. What is it? Are you paying in dollars and you receive payments as well in dollars? Are you managing some kind of a hedging strategy?A: We are managing some kind of hedging strategy and our sourcing is all in dollars from China. Sometimes, we feel that euro is being a little more dicey, then we also conclude some orders in euros from China. And our sales are in dollar, euro and some other currencies like Canadian dollars. So, when the cross currency with the dollar goes down, it affects our business adversely.Sumaira: Also about 10 percent of your revenues comes in from this smaller segment where you are supplying the conveyor belts. But over there, if I see, operationally it is not so good. Your earnings before interest and taxes (EBIT) was down in double digits, 20 percent maybe. Revenue itself was down. Are things looking to turn around in that space?A: Our conveyor belt business is keeping pace with our agro-chemical business in terms of volumes as well in terms of margins. We do not have any investments in conveyor belt business as we have in the agro-chemical business. So, naturally, the margins of conveyor belt business would be lower than those of agro-chemical business. However, in terms of volume, conveyor belt business is keeping pace with the volume of agro-chemical business and margins are steady as in the previous years.