BILT may hike prices by Rs 1000-1500/tonne next month

Ballarpur Industries (BILT) came out with its third quarter results. The company's Q3 consolidated net profit was up 11% at Rs 49.2 crore versus Rs 44.3 crore, year-on-year, YoY.

Its net sales were up 13% at Rs 1,164 crore versus Rs 1,032 crore, YoY.

In an interview with CNBC-TV18, B Hariharan, Group Director (Finance) of Avantha Group, gave his perspective of the third quarter performance and their divulged future plans.

Below is the verbatim transcript of the interview. Also watch the accompanying video.

Q: The revenue growth, both year-on-year and quarter-on-quarter, there has been a pickup. How has the paper's segment done? What can you say about the volumes and realisations this quarter?

A: The nine months volumes are up by about 60,000 tonnes this year. The pulps volumes are almost stable. In terms of this quarter, volumes are up about 20,000 tonnes. The selling prices have also gone up during this quarter by about Rs 1000 on an average.

Q: You have managed to maintain your margins, but you have not improved on them. Can you tell us about the margin picture this quarter? How have pulp prices and paper prices panned out?

A: The margins have come down compared to the previous year. We expanded our paper capacity, but not the pulp capacity. From an integration point of view, we are not fully integrated.

We are in the process of correcting that by expanding our pulp mill in Malaysia and India, which will be commissioned in FY11-FY12. The impact of that will show in the margins. The margins are down by about 1-2% compared to the previous year.

The margins are expected to get corrected in the next financial year because of the integration of pulp capacities, where we will to put about 120,000 tonne capacity in Malaysia and about 170,000 tonne in Ballarpur.

The Malaysian capacity will get commissioned by July 2011 and the other pulp capacity in India will commission by March 2012. In terms of paper, we increased the paper prices by about Rs 1,500 across the board on March 15.

We expect another paper price increase of about Rs 1,000-1,500 from May 1. This will partly offset the core price increases which have been announced by Coal India. This is another cost increase which is expected to come.

Q: What's your revenues and margins guidance for the rest of the year?

A: We will go by the current run rate. We are doing it about 20% year-on-year. We will see happening because there has been capacity utilisations coming up.

In terms of paper prices, we will do a better price increase from May 1. We will offset some of the increases in cost. We don