Revenues in the first quarter ended June saw a 13 percent decline ad the business was hit because of low volumes and minimum import price (MIP) imposed by the government, says Manish Sanghi, MD of Everest Industries.
Everest Industries is targeting to grow its revenues by 10 percent in FY17 against a decline of 13 percent in the first quarter ended June, said Manish Sanghi, MD of the company.
Speaking to CNBC-TV18, Sanghi said low volumes in the steel business drove the loss. The company was hit badly by the minimum import price (MIP) imposed by the government, he added.
However, he does not expect any such hits to occur going forward.
Below is the transcript of Manish Sanghi’s interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.
Latha: What happened? The steel business delivered a loss?
A: The steel business did not do too well. We lost on volumes to some extent but we also got hit very badly by the minimum import price (MIP), which was imposed by the government.
We work on fixed price contracts and we do not factor in price increases, which are sudden and major in nature and that hit us very badly. Virtually it is a Rs 6,000-8,000 per tonne increase of steel and that hurt us.
Manish: If you can tell us how things might pan out in the subsequent quarters. What kind of a revenue growth are you likely to see and what kind of earnings before interest, taxes, depreciation and amortisation (EBITDA) performance?
A: We had a revenue decline right now of 13 percent in Q1. But I am still hoping by the end of the year we will be growing, plans are much higher, but I expect this to grow by something around 10 percent.
Having said that, in the steel business, a lot of revenue depends on the price of the steel, which is a virtual pass-through through the system. So if the steel prices remain dull, I would be focusing far more on the profitability, on the value add, which we do to the products rather than the topline itself. Do not expect any more shocks of a kind, which happened with the MIP being imposed, so it should be smoother sailing. All my new orders are on the new pricing. So, things should look up going from here.The Great Diwali Discount!
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First Published on Jul 28, 2016 09:20 am