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KS Oils Ltd. has outlined aggressive targets in terms of revenues, where it hopes to close out the year with
Rs 1,200 crore topline and Rs 50 crore bottomline.
The company's CEO Sanjay Agarwal says that the key driver for growth would be to increase the level of
branded sales in terms of total turnover as well as the level of retail pack from the present 20% to 40%.
He also discusses the company's strategies and acquisitions and their impact on the numbers.
Excerpts from CNBC-TV18's exclusive interview with Sanjay Agarwal:
Q: Your Q1FY07 net sales were about Rs 216 crore and that would mean about Rs 900 crore for
the full year. But you are saying you hope to do about Rs 1,200 crore in sales and PAT of about Rs
50 crore on higher end of that band. What would be the key drivers?
A: As an FMCG company, the key driver for growth would be to increase the level of branded
sales in terms of total turnover and to increase the level of retail pack from the present 20% to
40%. This retail sales will give us an extra EBITDA of 5%.
We have a target to open 200-centre distribution point over a period of two years. 32 CDPs
have already been opened. To feed this CDP, the company has adopted the go- to-market
strategy. We are also in process to acquire plants in Rajasthan, MP, UP and Haryana. One
acquisition in Jodhpur has already been completed.
The total ad budget of the company in next one year is Rs 5 crore. So the key driver for growth
is aggressive marketing strategy.
Q: Just for FY07, what is it that is going to contribute significantly to your topline and bottomline
considering that you have acquisitions on the anvil and one already has been done? How much
of this acquisition in Jodhpur would bring to your books?
A: In terms of topline, Jodhpur acquisition is contributing Rs 150 crore and in bottomline, it is
giving Rs 10-12 crore. So this acquisition has been helpful to the company as it is working well
with our go-to-market strategy.
Q: Of this USD 20 million that you hope to raise, tell us by when do you plan to raise this entire
sum of money and is this only directed to the new acquisitions that you have planned?
A: We are planning to raise this fund in the next two-three months and this will be used for our
new acquisitions only.
Q: What route would you be accessing to raise this money?
A: We are evaluating various alternatives and what seems the most suitable to us will be
adopted.
Q: What is the current promoters stake in the company?
A: The promoters stake in the company is 32%.
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