Transcript of the Interview given by Mr.

R G Chandramogan, Chairman of the Company

to CNBC TV18 on 11th May, 2023, two days after the Meeting of the Board of Directors held
on 09th May, 2023

Duration CNBC TV18 Mr. R G Chandramogan

Slot 1 The next management with us Rupa See..Raw material inflation has been
Hatsun Agro with us… Yes.. very high in the last 2 years. But it
absolutely. So, Lets straightaway gets has started softening from the month
to it. Ah..The next something that we of April.. So April end we are back
are chatting with the…Hatsun’s to normal,. And the commodity
margins were hit by dairy inflation. prices are comparatively coming
The Company’s gross margin has down in April.. about 3-4%. So, it
come down to a 24 quarter low.. R G gives an indication that the inflation,
Chandramogan, Chairman of Hatsun the top of the inflation we have
Agro is with us. Now Mr already seen and the price correction
Chandramogan good morning. whatever we have to do we have
Thanks very much for joining in…So done it. So, going forward, we
Lets get the big elephant in the room expect a normal year similar to prior
all the way. This inflation that we to Covid. Covid 2 years and
have seen in milk price.. I think it subsequent to covid it was inflation
impacted your gross margins to.. and other things greatly hit. . we are
almost 300 odd basis points. Ah… back to normal..hopefully, this year
What’s happening now in the first we will be.
quarter.. milk prices…ah….have
started cooling off and what is the
outlook you can give us on the
margins given the trend in raw
material inflation.
Slot 2 So..ah…. your gross margins were Normally it should be 3% more
about 27%..what will they be....I compared to
mean.. when you say, you projecting a normal…sorry..compared to the last
normal year like pre covid where will year. Because, things are getting
they be fine.. FY 24 sir? better.
Slot 3 So, about…ah…about 30% gross We can look at.
margins.
Slot 4 Okay. So that …that explains the the See..the.. because of milk inflation,
margin picture and you know…the there is some slowdown on the
EBIDTA level you should be better growth of Milk. Milk is growing at
off..ah..lets talk about the top line a comparatively lesser pace. But,Ice
demand, volumes..ah.. what are the Cream and curd is growing
 trends that you are seeing in to the first comparatively much better and
quarter….ah…..as you know..kicked faster. So, overall probably ..we will
off this year and what’s the be able to grow ….say.. combined
expectation on volume growth?? effort, better than last year. But,
Probably, it is too early to predict the
whole year… because.just now only
we are getting out of the shocks of
inflation and other things. So,
market has to pull up and settle.
Slot 5 So..so., may be just the first quarter Q4 probably,, the volumes have
figure give us some sense on.. on been comparatively stagnant we can
volumes..ah.. to what extent, the say. But, Q1 of this year, probably
volumes impacted in Q4 on on Milk volumes are stepping up . But, we
specifically on your overall total are only in the middle of it. And
volumes and what do you envisage things are improving. Normally,
lets say for Q1 of the first half of the once you are adjusting the price for
year ? inflation and increasing the price,
market will take about a month to
settle down and then start giving a
small increase. So, all these
corrections have been done in the
fourth quarter and we are now set
with the first quarter of the year. So,
this first quarter probably, slowly we
are coming out of all the problems
and the inflation is behind us.
inflation is not hitting us any more
and inflation can deflate a little over
a period of june…july..coming
months
Slot 6 Okay..Alright. Sir, You could just Probably I don’t want to say
give us some more colour you know.. anything right now. Because, we are
it is difficult year.. because, things are only on the recovery track probably
shaping up… there is a recovery in I will have a better conviction by
sight? But What kind of a top line june end. But, definitely things are
growth you are unable to give us. But improving that I can say.
at least, we can assume double digits?
Double digit growth is definitely
positive in terms of revenues and in
terms of margins early teens are
possible 12-13% that is gettable?
Slot 7 Ok… So, We will take the See. You said the double digit
improvement as of now and atleast, minimum double digit…
double digit growth is what you are
working with. Now, in the last 4 years,
your gross block has see has gone up
 ..because you have incurred some Coming this year, probably, the peak
Capex. I think, close to 1500 to 2000 revenue potential is something like
Crores approximately. I want to 8500 to 8700..
understand from these revenues you
are delivering of around 7500 Crores. Current investment, we can go up to
What is the potential the peak revenue10000 crores with minor balancing
potential because you haveinvestment. Minor balancing
undertaken some Capex? investment may be required. But,
the main components are capable of
No… I asked the… yeah…peak… delivering 10000 Crores revenue.
peak potentials… peak potential.. not
what you are doing currently…but at
optimum levels, given the kind of
capex that you have done… in the
next few years… I mean what could
be the peak revenue potential?

Ok. Alright. Not.. Not for just this

year sir.. Going by the current
investment that you have made,
ah..without incurring too much of
capex, can you go to 10000 crores..
can you go to 11000 crores in terms of
potential?
Slot 8 Oh god. Ok. There is the capability As we are just coming out of
what not what you are saying you will inflation, it is too early to commit.
do.. but, the… the…what you can do But, we are on the track and we are
with the existing with some looking forward.
investments infused.
Ofcourse, Yes..
Slot 9 Yes.. No.. I just want to clarify that No. It is a history. No more the
ah.. sir, ah… this lumpy skin problem is existing and probably, we
disease..ah… how is.. yeah, we are have come out of all that
seeing the back of it now or that is
going to continue to be a factor in FY
24 as well.
Slot 10 Okay. So all behind. And you said Needs Correction. But, Probably it
that… compared.. in milk you are has also started recovering So, we
saying there is a bit of a slow down… are only on the transition as of now.
Is it? milk demand.. as compared to But, the transition is faster.
other products like ice cream etc.,.
Slot 11 Hmm…Okay. Alright Sir.. You could See the private companies probably
give us few more details… ah..you they had their own issues compared
know, you are trying to go to .. non to them. That’s a different market
south geographies.. and I think.. you and this is a different market. We
are targeting closer on 20%. Could are all you see.. risk Capital. And
 you tell us.. ah… what.. what is the Cooperatives have got certain
near term contribution that you are advantages of using government
looking at from non south… and also, help and infrastructure and other
had an other question… I am looking things.. say.. certain unions they
at Amul.. you know.. obviously very have the advantage of using the
different market.. but the growth in subsidy… certain unions they have
comparison to FY 20 has been far the advantage of using certain other
superior. How come that is benefits. We didn’t have those
happening? benefits. As a company, we
continue to grow and last 2 years, we
have been heavily investing keeping
the future in mind. And our Capex
has been done at a right time when
the capex was comparatively less for
the capacity what we have built.
going forward, but we don’t want the
comparible.
Slot 12 Ah.. That Mr Chandramogan Thank
you very much for detailing all the…
you know… the various aspects at
plane at the business time around
really appreciate you to joining us on
the show.