In an interview to CNBC-TV18 Yagnesh Sanghrajka, CFO, MT Educare shared his views on the financial performance of the company in Q3FY14 and the road ahead. On a quarter-on-quarter basis, the company reported a consolidated net profit of Rs 5.3 crore in Q3FY14, up 10.5 percent versus Rs 4.8 crore in the previous quarter. Its Q-o-Q net sales on a consolidated basis rose 25.5 percent to Rs 49 crore versus Rs 39 crore in the previous quarter. Sanghrajka is confident that the company will manage to maintain 20 percent annual revenue growth.
Below is the verbatim transcript of Yagnesh Sanghrajka’s interview with CNBC-TV18’s Sonia Shenoy and Reema Tendulkar.
Q: On a year-on-year (Y-o-Y) basis, your net sales have fallen by around 20 percent, your margins have gone down to about 20.5 percent and your net profits are also down by about 45 percent. Take us through where the pressure points have emerged this quarter and whether that will continue in the quarters to come?
A: Let me clarify, there has not been any dip in the topline. As compared to nine months of December 2012, we had a topline of almost about Rs 122 crore as against that, we are currently at Rs 158 crore, which surpasses last year’s turnover of Rs 157 crore for the full year. So, there has been an increase of revenue.
We are also ahead in terms of bottom-line. We have reported a profit after tax (PAT) for the quarter of about Rs 5.36 crore as against the PAT of about Rs 4.85 crore last year in December. So, there has been a 10 percent increase in terms of the profit.
Q: My question was on sales for this quarter, what was the sales this quarter and how does it compare to same quarter last year?
A: This quarter we had a sale of about Rs 49.4 crore as on a consolidated basis as against Rs 39.3 crore in the same quarter last year. There has definitely been an increase of around 25 percent and there is a bottomline increase of 10 percent. This year, we have started Mangalore Pre-University College (PUC). Our college in Karnataka has a campus of capacity of about 3,000 students, so there is an increase in depreciation year-on-year (Y-o-Y) which has gone up from Rs 2.2 crore to Rs 3.06 crore now. There has been increase of depreciation because this is the first year of the college. We have almost about 1,300 students, so that particular figure is impacting the margins. It is only because of depreciation.
Since we spent IPO proceeds on college, treasury income has naturally fallen down. This I have clarified in my earlier interviews as well as compared to about Rs 1.16 crore of other income. This quarter we have over 57 lakh. EBITDA margins have increased from about 20 percent in this quarter to 22 percent.
Q: So it has been about 25 percent growth that you have seen in your revenues in Q3 but in the last nine months, your revenues have grown by close to about 30 percent, what is the trajectory that you can expect in FY15? Will it be a revenue growth greater than 30 percent that we can expect for the next fiscal year?
A: Yes, you can easily expect. This is the vision and a very informal guidance that we have been internally having is that obviously our revenues you will see us growing by 20 percent at least every year. Why you are seeing this 25-30 percent -- this year we added Lakshya forum, which is the Punjab entity. We acquired Lakshya forum in April 2013 the consultation began. So because of the topline of Lakshya forum which is almost about Rs 12-13 crore for the year, this gets added from April 1, 2013 so this is the first year, the operations of Lakshya have been added to the company’s numbers, which is why you see 25-30 percent jump in the overall topline. Organically, we have been growing at 20 percent every year, which is what inclusive of Lakshya. In 2014-2015, we will have increase of continuing to be a rise of about 20-25 percent on the topline and at least about 25-30 percent in the bottomline. That is our internal expectations.
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