In an interview to CNBC-TV18, TT Jagannathan, chairman, TTK Prestige spoke about the company’s performance in the quarter gone by and business outlook going ahead.
Below is the verbatim transcript of TT Jagannathan's interview with Ekta Batra & Anuj Singhal on CNBC-TV18.
Anuj: So far we haven’t seen any kind of improvement in economic data and consumption pattern. What is your call for the second half of the year? Do you think performance would remain muted?
A: It will remain muted. Diwali was a flop. We expected substantial Diwali but it was by 10 percent growth over last year. I believe that the year is going to end muted.
Ekta: Can you give us a sense in terms of the quarter gone by, what stood out were your margins which declined around 80 bps to 12.1 percent. Can you give us a sense in terms of what margins you are working in this quarter which is in the Q3 and maybe what the trend also would be?
A: Our gross margins have not declined. When the topline does not grow more than 10 percent it appears that the EBITDA margin decline but it’s actually the inflation that is eating into overhead cost. Going forward in the year we expect to end up again at 12.2 percent growth.
Anuj: That is interesting because you are saying that inflation is eating into cost. Your last quarter margins were also down 12.1 percent. You do not have pricing power right now, are you losing it. What sense do you get when you look at the current business scenario?
A: Unless prices move up by more than 5 percent we do not take price increase. You cannot take price increase every week.
Ekta: What about the topline because the last time we had spoken the guidance was around 25 percent sales growth. In Q1 your sales were up 10 percent, in Q2 your sales were up 10.5 percent. What do you think the second half is looking like? Do you think that you can stick by 25 percent guidance unless it’s already revised?
A: I corrected that about four months ago. We corrected that to about 15 percent and now the year will end between 12 and 15 percent.
Anuj: Could you give us some outlook for next financial year?
A: It’s too early to predict.
Anuj: Any particular regions where you are seeing sustained impact of slowdown or is it broad based across various geographies?
A: It is broad based, it’s national.
Ekta: What about the southern markets. There were regional concerns, the power deficit which was impacting your performance there. Has that eased out?
A: It has eased out but not to the extent it expected because power situation in Tamil Nadu is still very bad.
Ekta: Any plan that you would be undertaking for the Tamil Nadu market, for example have you curtail sales, any precautionary steps that the management has had to take or is going to take because of the situation there?
A: On the contrary we are very aggressive. We want to gain market share.
Ekta: What would your market share be totally right now within the entire market as compared to the previous quarter?
A: We are operating in about ten different segments and each segment has different market share.
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