Excerpts from CNBC-TV18’s interview with Yogesh Mathur:
Q: Break up the sales figures in terms of the growth you saw by way of volumes and the kind of increase you saw in realisations?
A: I think volume growth and price have continued to be strong. I would say they have both contributed strongly to the topline. In addition, cost and product mix have also contributed to the bottomline. We are happy to announce a fairly significant improvement in the bottomline for the quarter.
Q: Where are the margins at this point and how have they improved sequentially as well?
A: EBITDA margins over the corresponding quarter are at about 30% and they are over 700 points. So it is over 7% better than the corresponding quarter last year and over 3% better on a sequential basis.
Q: Can you hold those margins? This is something you have struggled with particularly because of the pressures on the raw material side a few quarters back.
A: As we have said in the past, polycarbonate has now stabilised in terms of equilibrium and prices. Our strategy on capacity has also changed and capacity has increased on the DVD side, which has resulted in continuing strong CD capacity.
We are the world’s largest producers of recordable CDs and CD prices have significantly firmed up. As a result, business is now profitable and that is also reflecting in our bottomline.
Q: Can you put that into perspective? How much of an uptick have you seen in terms of prices at this point?
A: Over the last two-three quarters, I would say there have been over 30% or so increases in average prices of CDs. And on top of that, the benefit of polycarbonate’s price reduction over the last few quarters is coming in. That is what is contributing to the significant improvement in EBITDA margins.
Q: Given that growth in volumes and the fact that prices have stabilised, how much do you think you might end the year with in terms of sales?
A: We see the coming quarter also reasonably strong. I would not want to actually give a number; I would say that we should be able to sustain the current level of profitability. The sector continues to look strong in terms of growth as far as demand for DVDs are concerned.
Q: When do your capacity expansion plans get underway?
A: We continue to add capacity as the year goes by and the plan is to achieve about 0.2 billion disc capacity by the end of the fiscal. We are on track.
Their Photovoltaic business will start generating revenue from FY08.This will be a major boost.
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