Essel Propack has posted a 66 percent jump in its Q4 consolidated net profit at Rs 45.4 crore as against Rs 27.3 crore on a year-on-year basis. Consolidated net sales rise to 3.6 percent at Rs 603 crore as against Rs 582 crore during the same period a year ago.
In an interview to CNBC-TV18, Ashok Goel, VC & MD of Essel Propack, said the demand has softened in India, particularly in the FMCG space. The company has USD 2 million unhedged exposure globally, however has not faced any financial impact due to cross currency headwinds.
Going forward, Goel expects revenue to grow at 12 percent in FY16 and sees a 20 percent growth in EPS this year. He said the company is eyeing acquisition opportunities in Europe and may take the joint venture route.
Essel Propack’s current debt stands at Rs 906 crore, down by Rs 60 crore.
Below is the transcript of Ashok Goel's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.
Sonia: It has been a good margin performance for you which has led to 60 percent growth in the bottomline as well, take us through what led to this margin growth and is this 17 percent level sustainable?A: The margins have gone up due to couple of reasons, one is that some loss-making units have turned profitable. So there is a delta effect.Secondly, certain internal efficiencies that we have brought in that has helped.Third is ratios of oral care and non-oral care category that we service so there is an improvement of 2.1 percent in revenue terms which has improved in case of non-oral care which has been our focus.Latha: We were talking to Adi Godrej, their revenues have not fallen much, in fact their rural revenues have grown by 17 percent, is it that you can still pick and choose and deliver revenue growth next year even if the rains did not oblige?A: Let us look at in case of Essel Propack -- we are not just talking about India alone, we have our global presence. India constitutes only about 40 percent of total revenue. So therefore yes, India and China in that sense constitutes about 60 percent. So India - yes the demand has softened up particularly in the fast moving consumer goods (FMCG) space that we cater to and hopefully the rains are not going to be impacted this year otherwise the demand can remain soft as far as Indian market is concerned. When it comes to China, the oral care market has not been growing but the non-oral care has been growing at about 42 percent albeit at a lower base but another good thing that is happening in China is that there is a lot of premiumisation of toothpaste is happening. So as a result, we are able to get the business from the regional and local brands and that is going to help us going forward.Latha: Does the rupee hurt if you are 60 percent dependent on foreign earnings?A: No, it is only a translation loss which has no financial impact. All our currencies and revenues and the spends are in the related local currencies. Therefore, we hardly have USD 2 million globally unhedged which is only receivables again so dollar is appreciating so we are keeping that unhedged.
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