Expect 19-20% growth in FY17: Aarti Industries

Aarti Industries' operating profit margins for the fourth quarter last fiscal rose 20 percent backed by volume increase and lower raw material prices, said Rajendra Gogri, CMD of the company.In an interview to CNBC-TV18, he said the company's EBITDA is expected to grow 15-20 percent next fiscal on the back of low raw material cost. Further, Gogri is of the view that the company may grow 19-20 percent in FY17. The company's standalone profit was up 32 percent to Rs 69.6 crore against Rs 52.76 crore quarter-on-quarter.Below is the verbatim transcript of Rajendra Gogri\\'s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: It has been a good performance that you have seen on your margins, gone up from 17 percent to 20 percent. What led to this and do you think it is sustainable?A: Yes, basically one is volume increase. This is generally going to lead to spread off over a larger quantity. Second thing is because of the decrease in raw material prices, you can see there is a reduction in topline. So, effectively they also increase as a percentage operating margins but with current raw material prices, we see this as more of a stable number around 19-20 percent.Latha: How much do you expect your EBITDA therefore to grow considering that raw materials are cheap?A: Yes, this EBITDA growth also will be in the range of around 15-20 percent.Latha: Done 15 percent so you expect that it can rise up to 20 percent?A: Yes.Sonia: Your speciality chemical segment has fallen this time as far as the topline is concerned, it is down about 2 percent, are you facing any pressure there and will this pressure continue?A: Overall there is an increase in volume and the previous year, Benzene average price was around Rs 70 and FY15-FY16 is Rs 47. So it is reduction in the raw material prices, which has reduced the topline.Latha: Your full year EBITDA has risen by 23 percent but you are saying that for FY17, your EBITDA growth will be more like 20 percent?A: Yes, it should be in that range.Latha: Margins will be maintainable at 21 percent?A: Yes.