Key highlights

• Higher raw material prices (meta methyl acrylic, which is a derivative of crude oil) together with forex volatility and additional expenditure in business promotions for creating newer markets, affected the performance of FY'12. Despite, sales growth of 12% to Rs 62.33 crore, the PAT was down by 35%,
• Meta Methyl acrylic prices continued to remain high in FY'12 and were hovering around Rs 33000-35000 per ton. Management tried to increase the prices of finished goods, but the hike was not sufficient to cover the raw material costs.
• Although exports account for about 80% of total turnover of the company, management has indicated that it does not keep any of its export position open, and hence the positions are hedged as and when the contract is entered. So weak rupee did not per se help the company.
• During FY'12, new markets for quarts sinks at international levels were tapped. This includes geographies like Hungary, Iran, Columbia and Israel. New product ranges of quartz sink were introduced in US and in Germany. Although the EU sales got affected because of the recessionary environment, sales for the rest of the world continued to do better.
• Management has indicated that it wants its sales from India to reach to around 30% of total sales in next couple of years from current around 20%.
• Looking at the demand for stainless sinks in Singapore and in some EU markets, management has indicated that it will venture into stainless sinks and washbasin as well.
• After increasing the sink manufacturing capacity by about 10% in FY'12 to 250000 sinks, management has indicated that it will spend about Rs 8 crore for further increasing the capacity to 275000 numbers.
• Overall, management is cautiously optimistic for FY'13. Double-digit sales growth is what the management is aiming at but to bring that growth into bottom line is a challenge.