By Manish Gupta
Managing Director
What is your take on the current economic scenario in India and on the global front?
India is on growth trajectory and it will maintain the same growth story for couple of years. Indian economy and system has strong base and was able to survive the worst global crisis of 2008. Indian economic scenario is impacted by rising inflation but with momentum of growth, its scope and sustainability, the inflation will be absorbed. I also feel that close surveillance and monitoring by Central bank and various agencies of Central Govt will also help to curb inflation within short span of time.
At the global front, though situation is not fully recovered and we are getting jittery now and then in terms of nature crisis faced by Japan, economic and political instability in Asia, European Countries and USA. These factors have put the global business environment on the back foot for time being. The impact may continue in the first quarter of the current financial year.
However the global business would flourish as historically such tragedy is followed by a positive future. Asian countries, especially China and India are (also) poised to deliver notably higher GDP growth in coming years and with recovery path of USA and European countries, no unforeseen crisis is visible at global front.
One of the most important factor that has ruled businesses and markets in the current times is the worry of a spiral-ling inflation. You are in an industry (food processing) where this is even more pertinent. Can you share with us your insights on this?
Spiralling inflation is result of imbalances in supply of food and commodities market which is partially attributable to increased spending power with developing economies with vast population like India and China and partially due to speculation power in hands of few. History is evident that spiralling inflation takes its own cause of recourse to resolve the same and phenomena will be of short term.
We are into Agro based diversified products and spiralling inflation has affected the margins to some extent but with increased finished product prices and better parity though partially, we are able to shift the partial burden of increased input cost on customers. Even otherwise, the margin in the Agro processing industry is very low and we are used to cost control and reduction measures and believe in philosophy of penny saved is penny earned.
You have reported a good set of numbers for FY11 where your topline has almost gone up by 38% over the corresponding period while net profit is up 57%. What are the factors that have helped you in coming up with such solid set of numbers?
At outset, the company’s presence is in the segments of Agro Processing, Cotton Yarn, Maize processing & Windmills. In agro processing industry, the margins are not high and to keep a check and control on expenses and closely monitoring the parity is the basis to get sustainable returns in this business. We were able to rollover speedily during FY10-11, able to keep control over cost of operations, able to lower interest burden, with support and confidence of bankers and a lower tax outgo resulted in more growth in net profit percentile as compared to topline.
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