Key Highlights

The company is on target to increase its exports business further from around 55% currently to around 65% in next 18 months. Increase in contribution from Aquaculture, modern agricultural solutions and increase in sales of sports business will drive the exports.

Exports were strong in Q1 FY'15. Also the company got some advances and was able to improve its working capital cycle. Also in export sales, there are not much working capital costs and company is using more PC/FC loans at lower rates. Thus overall interest costs of the company were low in Q1 FY'15.

Margins were lower in Q1 FY'15 due to some change in mix of orders as compared to Q1 FY'14. On an annualized basis, management is confident of better OPM of around 10%. Exports and new businesses have higher margins.

The company though is not having any major orders in Geosynthetics business currently, expects the business to start traction from Q4 FY'15 onwards. According to the management, the sector has bottomed out. The company will get the advantage of being a market leader once the business starts showing some traction. While the scope and potential continues to remain strong, execution is slow in this segment.

Stable rupee is helping the company, although company is a net exporter. Company made some forex gain in Q1 FY'15.

There is not much capex required in Pune or Wai plants of the company. Maintenance capex and an additional line capex will be around Rs 10-12 maximum.

Overall, management is optimistic about profitable volume growth in FY'15 with Agriculture, Aquaculture and Sports being main drivers of growth.