Hatsun Agro posted over 50 percent increase in EBITDA year-on-year (YoY) in its Q3 earnings. The company also saw a significant margin expansion.

RG Chandramogan, Chairman of the company, said that the margins were sustainable and expected it to improve, going forward.

“This performance is sustainable and we can do it better than this quarter. Branded sales have taken about 96 percent of the sales and the commodity has been less. So, this is one of the reasons the performance has increased better. We believe that we can sustain this margin or improve on it better,” he said in an interview to CNBC-TV18.

Chandramogan attributed improvement in retail outlets as one of the reasons for increased margins in the quarter.

“Retail outlets, earlier we were doing about 9 percent of the total company sales. During the time of COVID-19, walk-ins have improved. Today we are doing almost 13-14 percent on the retail outlets. This is one of the reasons margins have increased,” he said.

Softened ad spends and low rentals have further aided the margin increase, he said. He said that Hatsun Agro procures milk directly from the farmers which helps keeps cost under control.

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(Edited by : Bivekananda Biswas)