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The company held its conference call for discussing Q4 and FY14 results.
Key highlights
The net sales for Q4 FY14 have decreased by 9% to Rs 187.24 crore. The net profit declined by 6% to Rs 13.08 crore.
The net sales for FY14 have decreased by 3% to Rs 762.2 crore. The net profit inclined by 4% to Rs 43.08 crore.
Volume index for Q4 is better than FY14.
The volume de-growth in the edible oil business was 9% for FY14. Q4 was also in similar range.
Sundrop oil reports value de-growth of 6% for FY14. The category volume declined by 9% for FY14, weighted average price hikes for the category was 8% but the mix changed in favor of lower priced variants resulting in a price de-growth of 5% translating to an overall value de-growth of 6%.
The other edible oil variant Crystal brand reported de-growth of 6% as volume was disrupted by strikes in the main market of coastal Andhra.
The competitive activities in edible oil category are at low level at present.
Act II revenues declined in the institutional segment but the growth in the consumer segment was healthy at 17%. The mgmt indicated that popcorn is currently less than 2% of the snacking business in India and it aspires to achieve 5% of the category in the medium term.
The growth of 17% in snack category was from pricing (increased price and reduced grammage) and product mix.
Peanut butter indigenous production at Gujarat plant started in January 2014 and the company plans to launch new SKUs in the category. The category will soon receive mass-media push and the product is likely to gain further traction.
Depreciation increased by 61% in FY14 due to capital investment the company made in last 12 – 18 months.
The mgmt said that the premium edible oil category has seen contraction by 10%.
The company has Ad.spend around Rs 10 - 12 crore on Sundrop oil and ACTII each in FY14.
The company's direct outlets reach of Sundrop Oil is around 76000.
The company will make capex, once it gets significant turnover from present capex.
The inventory in the balance sheet has seen rise due to arrival of corn before 31st March.
The company has seen fall in receivables mainly due to CSD, which paid out well.
The company will be launching 2 new products in snack category.
The current tax benefit is due to Kashipur plant, which will be there till 31st March 2015. After that, the company will enjoy tax benefit only for its R&D facility which is in Hyderabad.
The mgmt said that if it made acquisition, then it will go for large acquisition than smaller one.
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