Key highlights

• The net sales for Q1 FY13 has increased by 4% to Rs 170.24crore. OPM has increased by 28 bps to 4.81%. The company has reported a net profit of Rs 5.46crore, a rise of 16%.

• Sundrop oil sales grew by 5%. Volume was flattish for the quarter. Sundrop Heart volume has also grown well.

• Crystal oil volume is lower by 10% and net sales down by 6% - 7%.

• ACT II shown 20% growth, mostly driven by volume. Good growth was due to lower base of Q1 FY12. The management said that if ACT II grew by 20% in Q2, then they are in line with expectation taking in to account the present market condition. However, its actually is lower than their earlier expectation of 40% to 50% growth. So the board has decided to invest behind brand and leverage the brand to make it a broader snacks play.

• The rise in gross margin has resulted in company spending significantly on ASP.

• Ready to eat popcorn contributed 5% of total sales and did very well.

• Peanut butter did a good sales and had volume growth of 20%

• For ready to eat business, the company is in the process of setting up a plant in Gujarat, which will service Maharashtra or Gujarat, parts of Madhya Pradesh and Rajasthan.

• The company has also applied for land to the West Bengal Government for ready to eat manufacturing unit.

• The management on the corn import ban said that the directive from the Andhra Pradesh High Court to the government agencies or semi-government agencies involved in the issue, to issue us a license in an end user condition. This directive has been given by the AP High Court both to DGFT and to STC, which is the canalizing agency. DGFT has already instructed STC to issue the license

• The management said that it has enough corn inventory as present. On pricing front, management said that corn prices have risen all over the world due to drought like situation.

• Sundrop's has gained a 100bps market share to 46% in the premium sunflower oil.

• The company has offered free gramage in popcorn in modern trade so that consumer can move from Rs 10 pack to higher SKU.

• The management said that it doesn't see any significant impact of monsoon on popcorn and peanut butter, as both the products are in nascent stage.

• 15% of Sundrop Oil Portfolio revenue comes from Sundrop Heart oil, a premium product.

• The company is looking for location for setting up plant in Bangladesh for ACT II and expects the plant to come up next year.