Key highlights

The net sales for Q2 FY14 have increased by 1% to Rs 194.55 crore. The net profit grew by 15% to Rs 10.64 crore.

ACT II grew by 15%. Total food business was up by 16% - 17%.

For ACT II, half of the growth is pricing and half is due to volume.

Peanut butter has shown strong double digit growth due to pricing.

Volume of peanut butter is expected to rise, once smaller SKU is introduced in market.

In related to edible oil, the mgmt said that on Index of 100, Sundrop is at 99 and Crystal at 94. Crystal was impacted due to Andhra Pradesh problem, however margin were intact.

The company has taken price hike of 6% - 7% in Sundrop in H1 and couple more to go in H2.

The growth in top-line is more because of consumption rather in than rise in distribution.

The mgmt said that it has not seen any slowdown in edible oil category. Slowdown in economy has not impacted the company.

The high interest cost in Q2 is due to high working capital because of import of corn for consuming in next year.

By January 2014, the mgmt said it expects to see different packs of peanut butter made in India in market.

The company is going to launch 2 new products. One of it pack snack, which is waiting for regulatory approval, will be launched in this fiscal. The second product will also be launched in this fiscal, if it gets regulatory approval.

Ad spend was 4% in Q2. The mgmt said that if gross margin grow faster so do ad spend.

The mgmt said that global commodities prices for most of the commodities in the international market have fallen which have helped FMCG companies in international market. However, this was not possible for Indian FMCG companies, because of Rupee depreciation and import of crude oil. Infact, India has seen rise in commodities prices. However, last 10 days is seeing cooling of commodities prices in India.

Globally corn prices have softened, but the gain is offset by Rupee depreciation.

Sales in small town has seen disproportionate growth. Both Modern Trade and Non Modern trade has done well in Q2.

The company has 3.5 lakh direct outlets reach.

The mgmt said that in ACT II it has taken price hike to protect its profitability.

The effective tax rate was at 28% in Q1 and 21% in Q2. The fall is due to IT benefit it got for its innovation centre and profit generated from Kashipur plant which has IT benefit till April 2015.