Supreme Petrochem reported a 6 percent fall in revenue to Rs 681 crore as against Rs 722 crore year-on-year in the second quarter of FY17. Profit after tax (PAT) rose marginally to Rs 28 crore in the quarter gone-by.
Supreme Petrochem reported a 6 percent fall in revenue to Rs 681 crore as against Rs 722 crore year-on-year in the second quarter of FY17.
Profit after tax (PAT) rose marginally to Rs 28 crore in the quarter gone-by.
Lower commodity prices led to lower revenue in the second quarter, said Rakesh Nayyar, ED of Supreme Petrochem. Volume growth in Q2 was 12.7 percent.
In FY17, Nayyar expects revenue growth of 12 percent.
Below is the verbatim transcript of Rakesh Nayyar’s interview to Ekta Batra and Prashant Nair on CNBC-TV18.
Ekta: If you could just tell us about what led to the revenue decline of 6 percent, what might have been your volume and price mix this quarter?
A: Our revenue is also linked to our raw material prices. In the corresponding quarter of last year, the raw material prices in our case was very high. This year, the prices of the raw material have been very stable and at the lower end and that is the reason the end product prices were low and the overall total revenue looks down. However, whereas the volumes are concerned, in the domestic market we had a good growth of over 12.7 percent compared to the corresponding quarter last year.
Ekta: Volume growth of 12, if you could just repeat that.
A: We had in the domestic market our volume growth was 12.7 percent.
Ekta: What might your guidance be for the entire fiscal because long back when the fiscal had just started, you had guided for say around 14 percent growth, are you in-line to achieve that?
A: We are in-line. We would be doing around 12 percent growth for the year as a whole. We should be in all total volumes including our exports we should be doing 12 percent growth this year. That 14 percent must be for the domestic market perhaps but for the cumulative including our exports, the total volumes would be in the range of 11-12 percent for us.
Prashant: There was a big price impact is it in the quarter as compared to the same quarter last year?
A: As far as the raw material prices are concerned yes, last year the prices were ruling at around USD 1,300 plus for the raw material which towards the end of the quarter had sharply fallen and that is the reason we had an inventory loss last year and this year the quarterly prices were stable and they were closer to USD 1,000 or so as against the USD 1,300 last year.
Ekta: Margins were in single digits at 7 percent odd. Considering what you are saying about your raw material costs as well what might you guide for the entire fiscal?
A: It is very difficult, I would rather stick to the volume growth than to the earnings before interest, taxes, depreciation and amortisation (EBITDA) percent because when the raw material prices go down it is mainly a B2B business. So, the fall in the prices are also passed on to the end users also.
Ekta: Are you linked closely to what happens with crude prices?
A: Not really, but just eventually everything flows from the crude.The Great Diwali Discount!
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First Published on Oct 25, 2016 12:48 pm