Expect 25-30% volume growth in FY16: JBM Auto

JBM Auto’s revenue rose 2.5 percent in the quarter ended September 2015. Speaking to CNBC-TV18, Nishant Arya, Executive Director, JBM Group talks about the company’s second quarter performance and the future outlook. Below is the verbatim transcript of Nishant Arya’s interview with Mangalam Maloo and Reema Tendulkar on CNBC-TV18.Mangalam: What caused that weakness in the numbers? A: If I start with the topline, the topline of the company has grown about 2.5 percent. However, the steel market which is our major raw material is down by 12-15 percent. So, therefore the increase effectively would be more than 15 percent if I take the tonnage which has been processed by the company during this period and still the PAT margins of the company have grown about 18.5 percent even when the sales have not grown substantially. The EPS has also increased by about 17 percent. So, we are really seeing the company going strong and the fundamentals are becoming better. We are working quite a lot on the R&D front also because we are developing new products and think that how are we able to give a complete, simultaneous engineering and engineering perspective to our customers as a holistic solution provider. Mangalam: Your components division which gives majority of your revenues and earnings as well, we are seeing a bit of a margin contraction in that one as well, any particular reason for that?A: Two new plants have come on stream which is Indore and Sanand. Sanand has started to give results in this quarter which has improved the asset utilisation whereas Indore because of the commercial vehicle market is mainly catering to VE Commercial Vehicles (VECV) and Mahindra and Mahindra (M&M). So, that is picking up on the right track.Watch video for more