GST impact was definitely felt because of the last quarter: Ashok Kajaria, Kajaria Ceramics

In an interview with ET Now, Ashok Kajaria, Kajaria Ceramics, gives his perspective on the company's quarterly numbers. Edited excerpts:
Let us start by talking about the volume performance this time around, the quarter not look great in the profit side, sales have grown a bit but what was the volume performance?

Ashok Kajaria: The volume up was about 3% and the revenue growth was 6% and as you know the profits are down by 20% mainly because of destocking by the dealers and that continued for second half of June and continued till 15th of July but things have started looking up.

Please give us a sense as to then what the outlook is on your margin picture, was the GST impact felt this quarter?

Ashok Kajaria: GST impact definitely was felt because of the last quarter. In the second half of June as I said and things are going to be positive from 1st of September. I think the first date of filing the GST return is 5th of July as I understand and after that it is all about GST so which is very-very positive for organised sector and so for us.

And so what is your outlook on volume growth, how much will it pick up by once the restocking happens and demand comes back?

Ashok Kajaria: For the full year I have already said we are looking for a double digit growth and it will happen. It will happen and margins will also improve as we go down.

By how much?

Ashok Kajaria: We are looking at scenario where we will definitely meet between 18% to 20% EBITDA margins.

What is going to drive that and what is the outlook on your average pricing? What it has been in the first quarter?

Ashok Kajaria: Pricing is okay, pricing has not been impacted and GST is revenue neutral as far as we are concerned. As you are aware, the dealers were paying roughly about 28% to 30% tax that included CGST and SGST in the earlier regime and they are now paying 28% so they are at par with whatever they are paying and there is no change as far as pricing is concerned.

What has been the higher fuel cost impact?

Ashok Kajaria: Two things happened. Compared to last our fuel cost has gone up. Secondly, on branding we have spent lot more money like the year before in this quarter we spent about Rs 18 crores, the April-June quarter this year we have spent almost Rs 28 crores in branding. For the full year, we are talking about spending about Rs 100 crores so as we go long it will take care of itself but in the first quarter it has been impacted because of lower sales, some higher outsourcing, some more spend on advertisement but for the full year it will all be made up because that is our vision that we will spend about 100 crores on advertisement compared to about 80 crores last year.