CCL Products India reported weak set of second quarter numbers with a plant shutdown for maintenance work having an impact.In an interview with CNBC-TV18, the company's Executive Chairman C Rajendra Prasad explained why the company did not inform exchanges before about the extended shutdowns and the outlook ahead.
Below is the verbatim transcript of C Rajendra’s interview to Nigel D’souza & Sumaira Abidi.
Nigel: We learn that your numbers were not very good because you had a couple of shutdowns. I want to ask you this question. I believe that your India plant was shut for more than 60-70 days, Vietnam plant was shut for around 20 days. How come there is no alert? Investors out there, you had a couple of concall as well in September, but no alert coming out. Investors are absolutely bamboozled by these numbers.
A: Most of our shareholders, the major shareholders and everybody know and they are all happy with the numbers. What has happened was the freeze drying plant; most of the equipments are inside a cold room, there is minus 65 degree centigrade temperature, where we run the plant.
However, we thought that around 30-35 days we could complete the refinery, but once we opened up, then the collaborators or technical team from four-five countries, they had to participate. They realised that some things have to be changed for better and more automation has been put in.
Sumaira: My colleague was actually belabouring the point about your plant shutdown in the previous quarter. We are just wondering why a notification was not sent to the exchanges because we have not been able to come across one.
A: This is normal business because every time during this period, during the summer time, a repair work is taken up in all the plant, so holidays are given to people, etc.
So, this is a very exceptional case; what happened was in these ten years, freeze drying plant was never looked into, so some issues cropped up in the last minutes. However, when the Germans and the Danish people came and saw, then we thought this is the best time to do the whole thing instead of doing part work. So, then some of the equipments which we have ordered, they were delayed by about 30 days. Now, we are so confident because our clients have also been told on that basis and that is why we always tell, do not look at CCL quarter-on-quarter (Q-o-Q). We always look at year-on-year (Y-o-Y) and we are confident whatever we have told the market, to the small shareholder or our shareholders, we will make it; we will recover this lost time also.
Nigel: However, for a shareholder, for them to expect something and then not get numbers like these, let us put that point on the backburner, but let us talk about going ahead. Now you had guided for a 20 percent profitability growth. For the first half of this year in terms of EBITDA, you have done roughly around Rs 90 crore. A 20 percent growth will be around Rs 240 crore. Are you confident for the next couple of quarters, your EBITDA per quarter will be Rs 70-75 crore per quarter and even on the profitability aspect, first half of the year, you have done Rs 53 crore. If you have to give a 20 percent growth, then for the next couple of quarters, per quarter, you will have to do 47 crore when for the first half of this year, you have done Rs 53 crore. You are confident of that?
A: In the first quarter you saw the best results possible. So, if the first quarter continues in the next third and fourth quarter, we have reached out target.
Nigel: So you are maintaining that? You are saying 20 percent profitability growth we are going to get in this fiscal?
A: Absolutely, whatever we have said, we maintain it.
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