Expect to end FY14 with profit of Rs 25 cr: Kohinoor Foods

Satnam Arora, MD, Kohinoor Foods is hopeful of doing better in terms of profits and turnover for the second half of the current fiscal, because seasonally Q3, Q4 have been strong quarters for the company.

He expects the turnover to be between Rs 1300-1400 crore for the year and so, hope to end FY14 with a profit of Rs 25 crore.

Demand for both their rice and food products like ghee, namkeen, paneer etc is very good and therefore they expect good business in the second half. The company will be adding two new products like pickles and dry fruits, he adds.

Below is the verbatim transcript of his interview on CNBC-TV18

Q: Your total income has gone up about 12 percent this time around and your margins have by and large been stable about 11 percent - Can you give us an indication of how the second half of the year will pan out, what kind of revenue growth and margin performance can you see?

A: As you have rightly said that that the turnover has increased by 14 percent and net profit has gone up by 12 percent and in second half of this year, we expect to be much higher because that is our peak time. October to March is always a peak time and we expect the turnover to be between 1,300 crore-1,400 crore depending on the requirement, depending upon the customer.

However, our main focus remains on Kohinoor Foods; foods have grown 69 percent in the first six months and we have added many new products in foods. Customers’ response to Kohinoor Foods is very good and now we are adding two more products like dry fruits as well as pickles to their basket of products which already contain ghee, paneer, biscuits and namkeen.

Earlier rice prices had gone high and everybody was skeptical if these prices would be acceptable. People were also waiting for rice from Pakistan since the crop over crop comes about 15 days later than ours. 

However, prices in Pakistan are also very high, so the higher prices in India were accepted by the customers.The demand is very high even at these higher prices and so, we expect good business in the coming six months.

Q What is your expectation of what profits might look like?

A: It should be around 25 crore.

Q: What about exports. We have spoken about the ban in Russia been lifted of imports. How much can you export in terms of total quantity by the end of FY14 and how much can it increase in the second half?

A: Russia has opened up now, which was closed for two years. They have started buying large quantities from India, it is mainly non-basmati rice but we are also shipping basmati rice to Russia in small numbers. However, the long grain rice is going in a big way.

Therefore, now the market for long grain as well as basmati has opened everywhere. In long grain too, the new crop has come and customers are asking for prices.

Now, with dollar price also it is helping us, we will be able to do much more in basmati, in long grain rice,  as well as in Kohinoor Foods and our regular food. So, we expect six months to be very good.