Hope to maintain 25-30% growth rate ahead: Hanung Toys

Ashok Kumar Bansal, CMD of Hanung Toys is hopeful of maintaining 25 to 30 percent growth rate going forward. He further informed that the company has a strong order pipeline that will help it achieve its target.

Bansal also expects to keep EBIT margins at 18 percent. Going ahead, he is looking to expand the business in Latin America and New Zealand with an aim to sustain margins. "In the last three to four years, the margins are in the range of 17 to 18.5 percent. There is hardly any movement of 1.5 percent and as we have increased our capacity lately, we hope to maintain 18 to 18.5 percent EBIT margins," said Basal.

As far as the company's interest costs are concerned, Bansal explained that it depends on the Reserve Bank of India and if it continues to ease rates further, the interest burden is likely to come down. Besides, Hanung Toys is also switching some of its rupee loans into External Commercial Borrowings (ECB) to reduce the interest cost, he added.

Here is the edited transcript of the interview on CNBC-TV18.

Q: Do you expect this 25 to 30 percent growth rate on the top line to continue through the calendar year and where has the biggest trigger come from in terms of sales performance for you?

A: We hope that we continue to grow at 25 to 30 percent and the main sales come from the furnishing side, that too from the US market. We have plenty of order and we hope to achieve 25 to 30 percent growth.

Q: What about your margin performance, you have seen a good EBIT growth in your textile segment this time around? Do you think you can hang on to these 18.5 percent margins and where do you see it by the time FY13 and FY14 closes up?

A: If you see, in the last three to four years, the margins are in the range of 17 to 18.5 percent. There is hardly any movement of 1.5 percent and as we have increased our capacity lately, we hope to maintain 18 to 18.5 percent EBIT margins.

Q: Can you give us some details on the export business, specifically with respect to textiles, how is it growing because there are some talks of a slowdown in some of your export markets? Are you facing any restrictions over there or is it growing in the trajectory that you expected it to?

A: We are tapping growth not only in the US market, but also in Latin America, Australia, New Zealand and even in the Middle East. Therefore, we hope to achieve the required growth.

Q: What about your interest cost, what kind of run rate did you do this quarter and how do you plan to bring it down?

A: It depends on the Reserve Bank of India (RBI). It has taken the initiative and if it continues to reduce the rates, definitely our interest cost will come down. Along with that we are switching some of the rupee loans into External Commercial Borrowings (ECB) and that will also help us in reducing the interest cost.