Below is a verbatim transcript of the interview on CNBC-TV18
Q: Rico Auto stock has been buzzing quite a bit. It is up about 50-60 percent this week alone. Is there any latest development, any kind of updated on sales, any new orders that the company has won that we do not know about?
A: We have been trying to increase our exports and we have been successful in getting some very good export orders to the extent of about Rs 200 crore a year. This would be over and above whatever we are already exporting. Today, our focus is on the export market and the rupee is in a favour today as far as the exports are concerned. So that is the only change that has really happened.
Otherwise, by and large, if you look at the domestic market there is a recession. Fortunately, we are in the two wheeler industry. The two-wheeler industry is sustaining. If you look at the car industry, the car industry is under stress, but we are okay.
Q: Could you tell us the margins in the export business?
A: It is very difficult to really define the margins, but the export margins are probably a little better than domestic margins in any case. Let me tell you it is a global market and so it is not that one can say that one is better than the other and all the players are present in India and we are talking of global pricing and global competition.
This order we got was in competition with China and Europe and we are very proud of this order and it is for a very huge luxury market.
Q: What about your trajectory in revenues and profits? By the end of FY13, you had about Rs 1,000 crore of revenues. By the end of FY14, where do you think you will stand in terms of revenues and profits as well?
A: At the end of March 2014 we should be very close to whatever we had last year, maybe plus-minus 2 percent, but the year after that, because exports start from the year after that, so revenues will start growing then. If you look at the domestic market, hopefully after the elections the domestic markets should also improve and the revenues should grow reasonably well.
Q: Your finance cost was extremely high in the last quarter and it went up whether you look at it on a quarter-on-quarter basis or on a year-on-year basis. Could you tell us where the debt on the books stands at and what the plan is with respect to reducing it?
A: If you look at the debt last year and debt this year, we have been able to reduce the debt by almost about 25 percent and we are working on it and we are targeting that in another two to two-and-a-half-year's time we should become a debt-free company as far as long-term debts are concerned and that is what we have been working on. This recession has actually got us thinking as to what we should do in long-term and so this was an opportunity for us to introspect and go into details as to what we can do to reduce the debt.
Q: How long do you think it will take for the domestic market slowdown to continue and how much of your total contribution comes from the domestic market?
A: Our major contribution is the domestic market. I am talking of the domestic investment market. Today, when we say the domestic market, there are some customers like Renault, Ford and others, some of the OEMs in India who are actually manufacturing in India and exporting the products. So our products also get exported through them, but if you look at only domestic market our dependence is almost about 78-80 percent.
We will see the change taking place. We should be in about 25 percent bracket as far as our exports are concerned and balance would be domestic.
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