Hastsun Agro posted mixed earnings for Q1FY22. Revenue growth looked good at over 20 percent but profit looked feeble. There has been a contraction on the margin front owing to higher expenses, said RG Chandramogan, Chairman of Hatsun Agro Products, in an interview with CNBC-TV18.

On margins, he said, “COVID-19 has affected our market more than any other market. We operate in South India and Maharashtra; 72.5 percent of the cases have been here approximately. Shops were closed and our ice creams were not able to sell, this was our biggest lacuna. However, after June 20th, state by state relaxations are easing.”

“Hopefully, we will probably be able to recover in ice cream; the rest of the businesses have gained momentum like milk and curd but still in the topline itself because of the closure of shops we have lost about Rs 250 crore revenue which we should have got. This was the peak season for ice cream, and this is the reason why the turnover has gone up and the margins have fallen,” he said.

On other segments of business, he said, “Our main businesses are milk, ice cream and curd. Paneer and other things are incidental. In milk, we have got a substantial growth, curd also has grown compared to the last quarter but the problem is anticipated volumes have not come in because of operational difficulties.”

On capacity utilisation, Chandramogan said, “We were almost at 35-40 percent of expected sales in ice cream. We have around 80-85 percent capacity utilisation in milk, curd and others.”

On growth, he said, “We continue to invest even in the period of COVID and these capacities are coming useful right now. We believe that whatever we have got in FY21, FY22 and FY23 can be much better and not anywhere less in my opinion.”

On capex, he said, “This year probably our capex will be in the region of about Rs 450 crore.”

For full management commentary, watch the video.

(Edited by : Dipika)