Key highlights

The net sales for Q2 FY13 has increased by 6% to Rs 192.28 crore. OPM has increased by 85 bps to 7.48%. The company has reported a net profit of Rs 9.24 crore, a rise of 16%.

The company has seen improvement in gross margin and the food business contribution in Q2. Food contribution is up from 16% to 18%.

Sundrop oil sales grew by 4%, ACT II up by 16% and Crystal up by 8%.

Sundrop has seen a flattish kind of volume growth for Q2 and expects to see some growth in Q3 due to festive season. The mgmt said that for last 4 years, Sundrop is showing flattish type of growth in volume, as role of this brand is to grow the margin and profitability of the company.

ACT II sales was up due to mixture of volume and trade up. The company's Rs 15 and Rs 20 price point has shown good response. ACT II large part of growth came from price. The mgmt is looking at 20% growth.

The company now has got license to import corn and is working on documentary issues at present. It has not imported any corn in last 18 months and for last 18 months it was using corn from its inventory it has build up. For next 6 months it will import some corn and at the same time will also deplete its inventory. The mgmt said that the prices of corn have gone up significantly in last 18 months compared to when it brought last time and doesn't know now at what prices it will get corn. The mgmt added that as such it is unable to say anything on pricing front of the popcorn, but emphasis it will not compromise on gross margin, as it never want to enter in any product where gross margin is low.

Peanut butter facility in Gujarat will come next fiscal. The work is underway for another facility near Kanpur.

The company has acquired land in Bangladesh near Dhaka for setting up manufacturing facility. It will be small plant and manufacturing will start in next 6 to 8 months. Popcorn will be introduced in that market from that facility. It has tested the ready to eat popcorn and has received good response. As such, it will first introduce there ready to eat pop corn first and then ready to cook one. The mgmt said that beside Bangladesh, it has right to enter Nepal and Sri-Lanka, and will hit Sri- Lanka in near future before Nepal.

The mgmt said after Bangladesh it is looking to setup facility in eastern part of the country.

The company as on 30^th September had 1600 fleet on street compared to 1300 at the end of the FY12. The focus of these sales people is on ACT II, but also help for push of other products.

The company is today present in 375000 to 400000 stores.

The mgmt is looking at ASP spend of 7% - 8% on long-term basis.