Stable cotton prices will aid exports: Indo Count Ind

A: Delayed monsoons are there but the sowing has just started and we hope that there would be a satisfactory sowing and the crop would be there to meet the demand and we hope that the cotton prices will be stable in the coming year and this will maintain our raw material cost very well. So it will be helpful for all of us to export in a good way.

Reema: With raw material prices fairly stable, what can we expect the company to do in terms of its margins because at least last year you managed to prove your EBITDA margins a fair bit, it went up by close to about 500 basis points (bps) in FY16 can we expect your margins to improve?

A: The raw material cost as on date for us is between 53 percent and 55 percent range and the cotton crop is stable and the supply would be meeting the demand. So we hope that we will be able to maintain our raw material cost and to some extent, we will be able to improve our margins by utilising the raw material better.

Mangalam: One of the concerns for the company is the fact that it is geographically -- the majority of the revenue comes from the US, so any diversification expected and what do you think would be the future contribution from non-US markets?

A: The US is showing positive trends and the other markets like the other developed nations like European Economic Communities (EEC), UK, Australia they are also doing well, their per capita consumption is pretty high and what we hear about FTA being in the news if once that is signed between EEC and Canada there is a big opportunity which will open for our company as well as our competitors and we see a big scope there. As far as diversification of our company is concerned, we have already set up an office-cum-showroom in UK and office in Melbourne.

We intend to open up in Middle East and Europe as well. So we are diversifying in other markets as well. We have seen the FTA signed last year with Japan which is also helping us as we have signed marketing arrangement with Itochu and we are trying to penetrate that market as well. So there is a big scope for growing market out there apart from the US for us.

Reema: Currently we understand 85 percent of your revenue is coming from international market, is there likely to be any change in that ratio and which market amongst the markets that you are present in is the most profitable or has the highest margins for you?

A: We will be keeping our focus on exports because we are large scale operations wherein there is a huge demand out there for Indian goods. We have been fairly able to represent our country across the globe in all the developed nations and we see those markets growing, ours is a need-based product and there is a good export demand worldwide for Indian goods. We intend to keep our focus in exports and improve our margins thereafter in exports only.

Mangalam: In that case, can you give us a sense of how much of the proportion of your total revenue is contributed by your key clients like Walmart, House of Fraser and JC penny or how much do the top-five clients contribute to the revenue?

A: Our top 10 clients are 50 percent of our business and rest is also widely well spread. We have a fairly good base in the UK, at least 8 of the best retailers out there. We have just started in Australia, we have been successful in getting Australian doors open like Spotlight and other retailers and in time to come we are trying to penetrate in the European markets and that is where the real growth lies for the company apart from whatever which we are selling in the US.