Eye 20% bottomline, 15% topline growth in FY15: Essel

Below is the edited transcript of the interview.

Reema: Essel Propack has planned to diversify so from predominantly being an oral care you are now also catering to cosmetics as well as pharmaceutical business which has higher margins. Can you walk us through how much your margins can improve, where do they currently stand at and what is the outlook on the margins and the improvement?

A: First of all pharma and beauty care category would straightaway triple our market potential. That is what offers us the growth opportunity across the globe. As far as EBITDA margins are concerned last year it was in the range of 17 which is global average. Of course different geographies have variations. This year we are expecting global average of about 18 percent EBITDA.Sumaira: How much does this Russian unit actually contribute? Is there much contribution from that unit and what is the plan because apparently the turnaround that you have put in place was not very effective originally?

A: Russian is the only geography which has still not turned around and is likely to take time but it is an insignificant number in the overall context. But Poland for example has turned around, Mexico has turned around already.

Reema: On Russia I know you said it is not significant but could you give us a few numbers will it be a loss making entity in this year, if yes how much?

A: Yes Russia I think about USD 0.5 million will be the loss for the full year which again is already factored into our projections. Only thing is that we would have liked this unit to turnaround faster but the Russian market those who understand is a very difficult market.

Sumaira: Can you tell us by how much the losses could have shrunk in Poland?

A: Last year our losses were in the tune of about USD 2 million which this year we expect about a million dollar profit so there will be USD 3 million delta coming from there.

Reema: You all have won a very large order in Q4 for the Russian geography. Any such big orders that you all have won?

A: Yes we keep winning orders in oral care as well as beauty and pharmaceutical. We will come out with details little later once we sign those contracts.

Sumaira: Also in the previous quarter Q1 which just went by, this East Asia Pacific operations were actually quite a drag for you. How are things shaping up over there now and what can we expect for the rest of FY15?

A: Typically for Essel Propack the first and the fourth quarter are typically softer quarters. Having said that yes there was a bit of a volume offtake issue in China which in the second half we will recover, for the second half but the gap of the first half will still remain.

Having said that we expect our bottom-line to grow by about 20 percent this year and top-line by about 15 percent.

Reema: Currently oral care contributes about 61 percent to your revenues as of FY14. Since the company is focused on growing your other businesses at a faster pace, what is the internal target on how you want your revenue contribution to be?

A: Currently non oral care contributes global revenue of 42 percent. By the end of next financial year we expect it to reach to 50 percent. After having reached the revenue share then we will probably look at each geography and look at the volume targets probably that we still have to work out.

Sumaira: How much of a market share do you have in this non oral care business?

A: Non oral care our market share would be insignificant. The moment we talk about beauty and cosmetics, pharma and food, this has tripled our market size and therefore we obviously are insignificant on a global basis.