Expect double digit growth in FY17: Jyothy Labs

Rise in prices, which will add to the cost, could be passed onto consumers if needed, says S Raghunandan, CEO of Jyothy Labs. Any price increase would incrementally add to projected growth, he says. Speaking to CNBC-TV18, Raghunandan says that rural demand will be much better in 2016. With expectations of a better second half, the company could see a double digit growth in FY17, he adds. The company has been investing 12-13 percent of its revenues on advertising and promotions and will continue to do so in FY17 as well, he says. Below is the verbatim transcript of S Raghunandan's interview with Priya Sheth on CNBC-TV18.Q: Can you tell us if easing of commodity prices will be a factor in the growth of the company?A: As of now assuming stable commodity prices, we are internally measuring ourselves only on volume growths and not value growth, which is not clearly in our hands. Even if commodity prices are stable for most part of this year, we expect a double digit volume growth as far as Jyothy Labs is concerned.Any price increase if it happens because of increase in oil prices would surely be something extra over and above that.Q: So you would look at passing on prices to consumer?A: Definitely yes.Q: Do you anticipate that in 2016?A: If the raw material prices remain where they are, it will be difficult to take up prices. But, if they move up, I am sure we would be able to take up prices.Q: In terms of demand, we have seen rural demand lacklustre in last year. How you are seeing that shaping up in 2016?A: My personal thing is that it is going to be much better in the next year as far as rural demand is concerned. Of course everything depends on the monsoon because we have had two bad monsoons in the last two years. If the monsoon is decent this year and with a lot of government initiative and focus on rural, I am sure rural demand is going to perk up soon and we are going to see a much better second half in the coming year.Q: In terms of investments are you looking at ramping up investments in 2016?A: We are already investing enough money in building our brands and investments will continue to be strong going forward in the next year.Q: Any numbers that you can give us?A: We are currently investing about 12-13 percent of our revenues on advertising and promotion and we will continue to invest similar money in the next year.