Icecream maker Vadilal Industries posted third quarter results yesterday, with total income rising 3.45 percent year-on-year at Rs 68.25 crore. The company posted a net loss of Rs 6.91 crore, narrowing from Rs 9.52 crore YoY.In an interview with CNBC-TV18, CMD Rajesh Gandhi said the company is targetting revenues of Rs 500 crore next fiscal and said margins were likely to go up due to low input and interest costs and economies of scale. Below is the verbatim transcript of Rajesh Gandhi's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Latha: The losses compared to the year ago is less but can you take us through the quarter? When do you get back into the black?
A: This quarter we should be in black. This is a seasonal industry so winters are loss making for the company and summers are very high profit, so coming quarter should be in black.
Latha: What kind of revenues are you expecting for the full year and if you have any visibility for next year?
A: Our overall revenue is up by around 15 percent in general, so if we look at the overall revenues, it should be around Rs 425 crore this year and next year should be around Rs 500 crore.
Sonia: Do you have any capex plans. Currently you have a capacity of around 3.2 lakh liters per day, any plans to increase that?
A: Normally we have capex of around Rs 10 crore every year balancing some equipment and some items where there is a less capacity, so that is a normal phenomenon. Therefore, as usual we will be having around Rs 10 crore of capex every year.
Sonia: The other good part is your pickup in the gross margins. They have come to about close to 40 percent now versus 26.9 percent earlier. How much of this courtesy falling raw material cost. How much of this is courtesy curtailing of your own cost and what is the expectation going ahead?
A: The gross margins will continue upward trend, the courtesy basically - major is a raw material cost - that's one thing. Second, some portion of interest cost also has come down and some economies of operations also helping it out. So we have reached to a level where not a major capex and controlling the cost and moving forward and this was also plan of our strategy where we started focusing more on an impulse five years back. Therefore, we are now getting the results where we sell smaller packs that the margins are a bit high.
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