Key Highlights

In FY'15, despite challenges, higher exports and lower crude based derivates prices helped in ensuring higher sales and margins.

Exports, which account for about 20% of total sales, grew by 100% in FY'15 to Rs 70 crore. Management continues to remain optimistic about future export growth prospects. The company aims to be market leader in exports to neighbouring countries like Bangladesh, Bhutan, Sri lanka etc. New products and variants of products and new markets are driving the growth.

While China was never a competitor in Indian market, Chinese Government's strategy of focusing on local markets and reduce exports, have helped the company in achieving higher exports and venturing into newer markets.

Domestically, while things are uncertain, some sectors like construction and tyres are doing very well for the company. Particularly in construction, the company is able to increase the market share and its strategy on retail and going directly is working very well.

Paper is more or less steady, while tyres, paints, carpets, textiles, automotive components etc continue to grow domestically for the company. Basically it was more about acquiring market share and new products that drove the growth. Otherwise, domestically market was not good in general and things can be difficult as the same can not be maintained, if things don't pick up well in FY'16.

While normally, there is a pass through of raw material prices to finished goods, the sudden fall in raw material prices helped the OPM significantly. Margins jumped to more than 11% vis a vis a normal margin of around 9.5% for the company. Also exports fetched better margins and higher realization and a steady to depreciating rupee also helped.

Management aims to maintain this kind of margins, but will be very difficult, if volatility in raw material starts. Also some margins were achieved because of economies of scale advantage and better and higher product mix.

Company will take a call on the capex side once it gets some clarity on domestic economy.

While a small capex of around 5 crore is enough for FY'16, the management will take a call on capacity addition somewhere in H2 FY'17.

The company has shifted most of its investments on equity side, which was earlier scaled towards more on debt side. The company has no plans to use these surplus funds at this moment for any other purpose.

Overall tax rate for the company will be around 33% for FY'16. The company got some deferred and MAT tax benefits in the past which are no more there. The dividend and other income from investments are tax free.