Growth factor is due to consolidation, new mkts: Pincon Spirit

Speaking to Arup Thakur, CFO of Pincon Spirit, said the efforts undertaken by the company in the last quarter have paid off in this current quarter. New products and geographical spreads have helped the company, he said. "We are introducing new products in Karnataka and Odisha. He sais the growth factor is due to market consolidation and geographic spread and introduction of products.

"With the acquisitions of two more bands, we almost have a monopolistic share in West Bengal," he said.

He is hoping for a double-digit growth in FY17. 

He also spoke about the topline growth. It is almost 43 percent compared to last quarter.Below is the transcript of Arup Thakur’s interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Latha: As expected, demand is not an issue. 34 percent rise in income, 68 percent rise in earnings before interest, taxes, depreciation and amortisation (EBITDA) and 140 basis points (bps) rise in margins, profit is up, almost doubled, 61 percent rise in profit as well. Give us a little more colour about how the quarter went by and how is the current quarter shaping up? Is the run rate likely to be as good?A: Our last efforts have paid up in this quarter. We achieved our desired numbers and this quarter also, we expect to do much better because we are introducing further products like tetra packs, we are introducing in Karnataka which is having a very good market. In Odisha also, we are planning to introduce medium liquor and cheap liquor, which we are negotiating with the government. With the latest acquisition of two more India Made Indian Liquor (IMIL) brands such country spirit (CS) liquor brand in West Bengal, we are almost having a monopolistic market share in West Bengal, which is also going to give us a very good inputs in our coming quarters.In fast moving consumer goods (FMCG) also, we are consolidating in the existing market and our brands are being more accepted in the market.So, you can say, last quarter, our earlier planning has paid off well and this quarter, we need to concentrate in the existing market as well as we are focusing on new markets and newer product ranges also.Sonia: So do you think FY17 could be a year in which you get to double digit margins? I know it is a tall ask now because you are sitting at about 7 percent. But many of your peers -- your bigger peers -- like United Spirits are sitting at double digit margins. So, do you think that FY17 or maybe even early FY18 could be a time when Pincon Spirits gets to double digit margins?A: Definitely we are trying for that and we hope to gain a double digit margin. But maybe FY17 since, you can say, we are still in the growth phase and definitely, we are trying to cut down on the expenses part, which will be evident from the improvement in the EBITDA margins. So, hopefully down one to one and a half year, we should have a much better improvement in this line.Latha: Can you give us an idea of how the capacities are coming up in the various time periods and therefore, what will your volumes look like end of FY17, end of FY18?A: If you go sector wise, volumes have gone up in our IMIL sector, which we introduced one and a half year back. So from an initial volume of around 40 lakh bottles a month, it has gone up to 1.25 crore bottles a month.Latha: I mean your capacity, your capital expenditure (capex) and therefore, what is your overall capacity, FY17 and FY18?A: We intend to scale up our capacity to almost 2.20 lakh cases a month and in IMIL, our present capacity is almost 2.50 crore bottles per month, which we want to scale up to 3.5 crore bottles. In FMCG, we need to scale up to double considering the demand and the market expansion. So, this is how we want to plan out, so maybe gradually in two year’s time, we will be achieving this mark.Sonia: Just wanted to ask you about your topline growth rate. It has been very steady so far.A: It is almost 34 percent compared to last year’s quarter. So, growth factor is due to basically market consolidation and geographical spread and introduction of the product, because Pincon Spirit is a growing company and definitely growing companies do show good results if you plan out properly.