Key highlights

The net sales for Q1 FY15 have decreased by 2% to Rs 179.03 crore. The net profit declined by 16% to Rs 5.35 crore. Higher ad-spend pulled the operating margin down by 60 bps to 5.3%. Due to the product launches, the company increased ad-spend from 5.5% to 7.8% on YoY.

Sundrop edible oil volumes were down 11% whereas Crystal volumes were down 1%. Overall edible oil revenues were down 12% during the quarter.

The mgmt said that it is more focused on food business rather than oil and is very comfortable as long as it has 45% market share in premium oil business.

ACT II popcorn revenues were up 30%.

Food business grew by 30% out of which 10% growth is due to institutional business, 10% due to the popcorn business and a 10% contribution from product launches.

The company has rolled out ACT II popcorn bakes in three flavours - masala, cheese and tomato.

ACT II is 2% of total Rs 12500 crore sweet & snack market.

Peanut butter has grown higher than 30% (on small base). The company has rolled out smaller SKUs of peanut butter in some states. In next 6 months, it will do sampling of peanut butter with Sundrop oil.

The mgmt said even though it has started producing peanut butter locally, it can't take its prices down, as the category can't grow on its own and to grow the category, it required money to invest behind it.

Depreciation increased 50% due to capitalization of the Jagadia plant, Gujarat.

The company has recently commenced a new unit in Jagadia, Gujarat, to manufacture peanut butter. Also, it is expanding its production capacity of ACT II popcorn and other products at its Hyderabad and Unnav units.

The company has completed most of its capex and going forward, will invest on A&P.

Going forward, the company will enter into new products and all these products will be manufactured locally.