Hatsun Agro Products Ltd. — Call Transcript 2023

Jan 27, 2023

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HAPL\SEC\68\2022-23

27[th] January, 2023

BSE Limited

Corporate Relationship Department 2nd Floor, New Trading Ring, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001

National Stock Exchange of India Ltd Exchange Plaza, 5[th] Floor, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra(E), Mumbai – 400 051

Stock Code: BSE: 531531

NSE: HATSUN

Dear Sir / Madam,

Sub: Transcript of the Interview given by Mr. R G Chandramogan, Chairman of the Company to CNBC TV 18 on 20[th] January, 2023, a day after the Meeting of the Board of Directors held on 19[th] January, 2023 – Reg.

Ref: Our Office Letter Ref No: HAPL\SEC\67\2022-23 dated 21[st] January, 2023

Pursuant to Regulation 30 – Schedule III, Part A, Para A, item 15(b)(ii) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the transcript of the interview of Mr. R G Chandramogan, Chairman of the Company given to CNBC TV 18 on 20[th] January, 2023 is enclosed for your information and records.

This information is also hosted on the Company’s website at https://www.hap.in/pdf/Transcript-Q3-22-23.pdf as per Regulation 46(2)(oa)(ii) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Thanking you.

Yours faithfully,

For Hatsun Agro Product Limited

GOPALAN Digitally signed by GOPALAN SOMASUN SOMASUNDARAM Date: 2023.01.27 DARAM 14:32:50 +05'30'

G Somasundaram

Company Secretary and Compliance Officer

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Transcript of the Interview given by Mr. R G Chandramogan, Chairman of the Company to CNBC TV18 on 20[th] January, 2023, a day after the Meeting of the Board of Directors held on 19[th] January, 2023

**Duration **	CNBC TV18	**Mr. RG Chandramogan **
Slot 1	To chat with us. Hatsun Agro has delivered a mixed wagon Q3 the Company’s margins witnessed an expansion on a earlier basis even as it contracted sequentially. R G Chandramogan, the Chairman of Hatsun Agro Product now joins us on the show now. Afternoon sir and thanks so much for joining in. We were just telling our viewers your margin performance. Could you give us an indication about the pulls and pushes on the margins in the subsequent quarters what should we expect?	Actually our EBITDA has increased compared to last year. Actually last year same time we did 162 versus 191 this year. Taxation is sorry depreciation and interest has been higher compared to last year that has resulted in one crore less profit on the PAT. Going forward, the last three years we have done a lot of infrastructure investments and we also had a dip of milk procurement due to incessant rains and lumpy skin disease. So these are becoming past. Going forward we expect things to improve and again the season for ice cream and curd will be better that is our expectation.
Slot 2	Margin range sir for us to work with and how much of milk procurement price has gone up?	Procurement price has gone up by almost 16 percent compared to last year to this year and the increase of selling price took place in stages compared to inflation that hit but now inflation is moderating and probably we are not expecting any price increase and inflation and the price is also accommodated to.
Slot 3	Okay. Mr. Chandramogan, two part question here. First when you talk about price increases that you have taken in phases so far how much of a price hike has been done by the Company in nine months and have you seen an impact on volumes of demand because of that ah sir going	FY 24, we expect a good growth because probably the stability has come now. Stability once and it comes probably the things will start improving. We expect probably the products also to play a major role like ice cream and curd because seasonality factor has been heavily affected in last six months due to

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forward do you expect recovery or heavy rain and normalcy is coming
better growth in FY 24? back so we expect things to improve
from this quarter.
Slot 4 Okay. So when you are talking about No. Price increase will also
improvement but can you tell us if definitely will add to it and apart
volume saw decline on a quarter on from price increase we should be
quarter basis or on a yy basis because able to get a marginally better
of the price increases? perfect. But it is too early to predict
because we are only the month of
January but things are looking
progressive.
Slot 5 What is a volume growth in Q3? Q3 we already had an EBITDA of 11
point
Slot 6 No sir. Volumes. Volumes. Volumes actually didn’t
increase a lot because the price
increase has taken place. Now price
increase has to stabilize and the
volume increase will happen only
this quarter as well as the next
quarter.
Slot 7 Did volumes decline? Did volumes No no. Milk volumes have come
come down? If yes, by how much year down by about 4 to 5 percent. But
on year and quarter on quarter? this is not occuring this quarter and
the ice cream volumes and other
things have already grown.
Slot 8 Okay. All right. So you have also Actually capex we have done
approved fund raise through Rights sizably well in the last three years.
Issue and QIP this time around the So last three years once when covid
quarter gone by uh by when do you was there, our project cost
think you’ll complete it uh what kind implementation were comparatively
of uh usage will you see because of the less and we were able to do it faster.
funds that you have been raising will Now we don’t require capex
it be capex debt reduction uh can you infrastructure. This is mainly for
tell us more details on this? debt reduction and our 300 Crores
has been raised and our debt equity
ratio will already fall to less than 1:1,
from tomorrow, most probably the
funds will be available from
tomorrow.
Slot 9 Okay So we have not gone for QIP and we
are settled with Rights Issue and it is
already done.
Slot 10 Okay. So all of the money raised by Ice cream probably there are two
the Rights Issue will go to bring your brands and probably, every year
debt with debt to equity below 1x and probably the brand contributes,
not for capex because your capex immediately I don’t have the figures
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	plans have largely been completed. So how much did ice creams contribute to your overall revenues and do you have a target because earlier you have indicated mid-teens kind of revenue contribution.	to say. But probably it is just increasing.
Slot 11	Okay. So you are taking about capex that you have already announced and you do have couple of plants which will start commencement of production as well and they will start contributing so to say from FY 24 as well. How much of a total addition will you see to revenues? Will it change your margin profile as well in anyway?	Right. It will change the margin as well as revenue. Both. But probably it is to early to say recent milk arrivals has improved because after the rain, milk arrivals have started improving. It is too early to predict. But the next year probably we can expect something like 14 to 15% growth without any difficulty.
Slot 12	Okay. 14 to 15% growth without any difficulty and when you are talking about growth will you be spending more on advertisement as well? You did see a decline this time around that is something that led to improvement in margins as well. What is the range thatyou can work with?	Normally advertisement we spent about 2 percent of the revenue and it will be more as a percentage for ice cream and probably less as a percentage for milk. So overall we normally spend about 2 percent.
Slot 13	How is competition? You know lot of d2c brands which have opened up. Peoples who have brands which are selling vegan ice cream low calorie ice cream. Could you give us the sense of the competitive intensity in the market?	We are we are mainly focused with dairy fat ice cream and we don’t even just go for vegetable fat ice cream and all that. Vegan and all that is very limited market and limited niche and we are focused on dairyfat ice cream.
Slot 14	All right Mr. Chandramogan it was a pleasure speaking with you sir. Thank you so much for joining us and taking us through quarters through performance and the after going forward as well that’s the word coming in from Hatsun Agro Product the stock has recovered a tad bit from the lows but still down one and half percent in trade right now.