Will achieve 10% growth in FY17: VIP Industries

Due to lack of institutional order, VIP Industries will revise growth forecast downwards to 10 percent from 15 percent, Dilip G Piramal, Chairman of the company told CNBC-TV18.

Weak marriage season has affected sales, he said. "Our margin growth is good and that is giving us a good satisfaction," he added.Below is the transcript of Dilip G Piramal’s interview to Ekta Batra and Prashant Nair on CNBC-TV18.Ekta: Let us start with what you are anticipating in terms of growth. Double digit is what you have guided for at least in the coming quarters. Are you on track to achieve that? How is the on-ground business looking for you at this point?A: What happened last year was that we got one exceptional institutional order of about Rs 50 crore. When I spoke to you last about a quarter ago, we were hoping that we will get another institutional order but that is not happening. So, we have to revise our growth forecasts a little bit downwards. So, without that institutional order, it is still double digit and maybe about 15 percent. If you take the actual figures, the growth forecast is only about 10 percent. But our margin growth is good, so that is giving us good satisfaction and that is also as a consequence of our strong competitive position.Ekta: Just want to clarify that -- 10 percent growth on account of a high base?A: Yes.Ekta: Versus how much that you were anticipating earlier inclusive of the high base?A: There was another large institutional order, which was on the anvil, but it was not very sure, but now, it looks as if that is not going to happen. So, that would have given us another 5 percent increase, so that would have been 15 percent increase.Also, what has happened is that in this last quarter, the marriage season was very weak. So, most of the industries, which are dependent on the marriage season, their sales have been affected, like the jewellery industry particularly.We are not only driven by the marriage season. We are mainly driven by travel. But in the eastern part of India, the marriage market is very large and we have a very strong market share there.So, that was a bit weak, though the anticipation is that the marriages will now take place in Q3 after Diwali. So, that is a positive sign.Prashant: You said you are mainly dependent on travel. Is there any estimation on how much of it is dependent on outbound travel?A: It is mainly outbound travel. It is also domestic travel. It is not only international travel.Prashant: The point I was getting to, there is so much unrest around the world. Even in typically calm, serene, holiday favourite destinations. If not now, do you foresee when the peak season comes, the travel itself could get affected, any thoughts on that? That is a big end-user industry?A: I doubt that. First of all, I do not think we are dependent so much on international travel. Secondly, both the aviation and the train travel in India is increasing quite rapidly as well as even road traffic is increasing quite fast. So all that should give us very good growth.Ekta: You were talking about margins. What is the best that you can do in this fiscal and is there any room for a price increase?A: Normally, we do have two price increases in a year -- one in summer and one around Diwali. It is not in all the products. There is an annual price increase in most of the products, but we will take that nearer the date of the event. Price increases are not very large. They are not more than 5 percent and they are usually about 2.5-5 percent. That all depends on the competitive position on the ranges we are offering at that particularly time.