Tilaknagar Ind guns for 10% upside on the topline

K Laxmi Narasimhan, Deputy MD, Tilaknagar Industries  talks about his company’s Q3 figures while stating the roadmap here on with CNBC-TV18’s Sumaira Abidi and Nigel D’Souza.

Also read: Allied Blenders eyes Tilaknagar Industries for acquisition

Below is the verbatim transcript of the interview:Q: I want to talk to you about your acquisition of these two Indian Made Foreign Liquor (IMFL) brands Volga and Blue Lagoon. We haven’t spoken to you since your earnings this time around which have been quite good. Tell us now post this acquisition, what is the volume upside that you see?A: We would be gunning for 10 percent upside on the topline.Q: In the past quarter, we have seen a lot of upside with regards to vodka as well as gin, what is the kind of traction you are seeing in both those two segments?A: I would draw a distinction between gin and vodka. A number of players play in the vodka segment, not to mention Diageo and any other companies, but we are very strong in the gin space. After United Spirits, Tilaknagar Industries brings up second gin and we find that this acquisition is very accretive in nature and very complimentary where two plus two becomes four.Q: We understand that there are some industry wide headwinds but nevertheless you have seen an almost 19 percent decline in your EBITDA per case for the nine months for FY14, what is now the outlook, how are you going to wrap up FY14 and going forward from here, what is the outlook on how your EBITDA per case could pan out?A: No, doubt you have talked about EBITDA per case which has declined. But the EBITDA has remained marginally positive; the profit has gone up by 16 percent. We are a company already in the premium space. We have a 22 percent EBITDA margin but if were I to chase an opportunity that is coming at 16 percent EBITDA, I would chase that to increase my quantum. No doubt, my margins would come down and settle somewhere between 16 percent and 22 percent but whatever is getting acquired is also accretive in nature. I would contrast this with the other two listed companies, EBITDA margins by 13 percent and 10 percent respectively. Last year we did 14 million cases. It would be in my wish list to chase another 6-7 million cases at the same high EBITDA levels and the cost in the EBITDA per case level but if I still get an opportunity to chase at a very positive but lower than current EBITDA per case level, I will do it.