Low demand, selling price hit biz; see 10% topline growth: Jasch

With revenues down 3.3 percent at Rs 23.3 crore, Jasch Industries has posted a lacklustre growth in the third quarter of FY16.In an interview to CNBC-TV18, JK Garg, CMD of the company, says the revenues were weak due to low demand in the holiday season. In addition, reduction in selling price also impacted its topline. The company has reduced the selling price by 7-8 percent. "We have reduced the prices because of the low raw material prices and competition in the market, so we cannot keep the prices higher in comparison to the peers," he adds. However, Garg sees revival in the market and maintains guidance of 10 percent topline growth going forward.Below is the verbatim transcript of JK Garg’s interview with Reema Tendulkar on CNBC-TV18.Reema: Let us focus a bit on the topline. It has declined by 3.5 percent on a year-on-year (Y-o-Y) basis, could you walk us through the key reason for that and when can we expect a pickup? A: These two months, about Diwali or you can say the holidays, they are the low season and there is low demand in the market because of the holidays. Otherwise you can say when the market conditions are not effecting, just like this automation division, there we have increased in sales and synthetic leather division because there is a case of season in the shoe industry and other segments. So, normally these two months are a low period. The profit margin, apart from the raw materials, we have reduced the selling price also. This is also one of the reasons for low sale because of the lower price of our products. Main profit is because we have carried on the modernisation and other automisation of the plant and the profit is because of those measures we have taken. Otherwise to capture the market we have reduced the prices of these products. Reema: How much have you reduced your selling price by? A: Say by 7-8 percent. Sales volume is low because we have reduced the prices because of the low raw material prices and competition in the market we cannot keep the prices higher in comparison to the peers. Reema: Your volume growth would have been 4-4.5 percent but on account of a reduction in your selling price to the tune of 7-8 percent your topline has declined by 3-3.5 percent right? A: Yes.Reema: You said that Q3 is particularly a weak quarter because of the holiday season, historically it is a weak quarter, but what should we expect then in Q4 once demand comes back, what could be the growth?A: We have projected a growth of 10 percent. I am hopeful that we will be achieving the growth of 10 percent.