Manpasand Beverages to maintain current margin & sales growth

However, we will maintain margins and sales growth at current levels, he said.Below is the verbatim transcript of Abhishek Singh's interview to Latha Venkatesh & Sonia Shenoy.

Sonia: There are some concerns that you are facing like a lot of competition from your peers especially Parle etc. You enjoy 10 percent market share in the fruit drink business. Any kind of plans to increase your market share and if yes, what is the strategy that the company is going to advocate over the next 6-12 months?

A: The strategy is very simple. We need to enrol more outlets, need to appoint more distributors. As such there is no competition; they are working in their market, they are giants and they have their strategy in place. However, we also have our strategy in place, so that is not an issue but we are working hard to get more retailers with us.

We did a survey of our market, retailers are happy to get associated with us because they are getting good margin. So they will only support those companies which are paying them better margins.

Latha: How are you margins compared to the competition?

A: I pay, to my retailers, 5-7 percent more margin than the competitors.

Latha: What was your market share one year ago and what is it now?

A: It was around 5-6 percent one year ago and this time it is around 10 percent.

Sonia: Are you looking to get into any other avenues. You are concentrated on one drink - Mango Sip and 80 percent of your revenue comes from there. So that is a bit troublesome for a lot of investors. Would you look to diversify anytime soon?

A: It's not a troublesome issue because mango is a popular fruit in India and its there in our DNA also, so if multinationals can come out with other flavours and can go in 200 countries; we can take our mango product in these 100-200 countries. Therefore, we are only focusing on mango.

Sonia: How many distributors do you have now and how much you plan to increase to?

A: We have around 2,000 distributors as of now but we plan to appoint 3,000 more, so we will be having a total count of 5,000 distributors in the next one year.

Latha: Did you have any problems because of demonetisation?

A: It was a temporary problem for 10-15 days.

Sonia: You are planning to increase your number of distributors and for that you may need capex as well. What is your current capacity utilisation and how much do you plan to grow the annual capacity to?

A: For increasing distribution, we are going to appoint many more sales officers, area sales managers and to cater to all these distributors, we are coming out with four new plant and those will be operational in next 18-24 months.

Sonia: The cost would be?

A: An investment around Rs 100-150 crore in one plant.

Latha: You have internal accruals or you will have to raise capital?

A: We recently had a qualified institutional placement (QIP) issue, so all has been taken care of.

Sonia: So around Rs 600 crore expenses will be over how many years?

A: In the next 18 months.

Latha: How much railways contribute to your kitty?

A: Around 15 percent.

Sonia: The other thing which the street likes is the way your margins have been maintained at 20 percent. Is there any scope to increase margins further?

A: Twenty percent is a nice margin but we are trying to increase it.

Latha: Your note says 2,700 distributors. What are the regions, any specific state which has the highest number of distributors?

A: In northern part of India like Uttar Pradesh, Bihar, Punjab and Haryana.

Sonia: You said your margins will be maintained at around these levels but what about the sales growth. You ended the first half on a base of around Rs 350 crore which was 50 percent growth. What can we expect from the company in second half?

A: We are trying hard to maintain that growth.