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00:00Hello and welcome, you are watching the Small and Mid-Cap show.
00:11I am Mahima Vachrajani.
00:12Well, we are going to speak to two very interesting managements today, Chamanlal Setia Exports
00:17and AGS Transact Technologies.
00:19First one up, we have Chamanlal Setia Exports and we are joined by Mr. Rajiv Setia, Joint
00:24MD at Chamanlal Setia.
00:26Welcome to the show, Rajiv.
00:28My first question to you is that, you know, there is a possibility that, you know, the
00:33government is mulling over easing export limits for the non-Basmati rice segment.
00:39You know, if this happens, you know, if this happens, what is the kind of benefit that
00:46your company will have, one thing, and overall sectoral benefit, what are you expecting that
00:52how will this aid revenues for all the companies that are rice producers?
00:57Yeah, at the outset, I would say it is excellent step of the government, if they really implemented
01:08MEP of $500 and $100 export duty, that too on the quantity base.
01:18Quantity base is the right way of imposing any kind of tax in import as well as exports.
01:26So I mean, apart from normal low price non-Basmati rice, we have good varieties also like Sona
01:38Mussoorie, which has demand all over the world, because our South Indian people live all around
01:45and they're doing well, and they really need this size.
01:50And there are a few other varieties in non-Basmati, which for my company also, we have this kind
01:58of exports, and because of this kind of a ban, we were not able to do it.
02:08So because at this moment, only parboiled rice is allowed, non-Basmati, and we expect
02:16the raw non-Basmati rice is also allowed by the government.
02:23If they do so, so the Sona Mussoorie, which is doing good qualities in non-Basmati, they
02:31will also be sold around the world.
02:35Understood.
02:36Rajiv, I also understand and media reports suggest that the floor price set for this
02:42will be around $500 per ton.
02:44What do you think about this pricing?
02:46Do you think that this is sufficient, or do you expect that the price hike should have
02:51been more?
02:52Right now, it is okay, $500 for the good qualities.
03:02As regard to international prices is concerned, it is the right price.
03:08But yes, when the flow of paddy and the crop arrival will increase in the coming time,
03:15when harvesting will start, maybe government will have to reconsider and reduce the MEP.
03:22$500 may not work at one point of time, it has to be reduced to $400 or $450, something
03:29like that.
03:30It depends upon the, because business doesn't happen on arbitrary floor prices, it happens
03:38on the economic law of demand and supply.
03:42This is how the prices behave in the international market.
03:45And we have competitors also, for non-Basmati, Thailand is a big competitor, and a few other
03:52countries also.
03:53So we have to be very careful for this kind of business.
03:58Understood.
03:59And there are media reports suggesting that the 20% levy of shipments on parboiled rice
04:05may also be scrapped.
04:07So how do you think this will aid your company as well as the entire sector?
04:14It is going to, because my company is mainly into Basmati rice, and we are very limited
04:20in non-Basmati rice, so for me, it's not really affecting any side.
04:28But yes, opportunities do come for every industry, every exporter, and if done on quantity basis,
04:38it is done permanently, it is a very good way, otherwise plus minus keep on happening,
04:46you know, that's not right for the nation as well.
04:50Understood.
04:51And, you know, considering all of these things, let's say if this happens, you know, your
04:58revenue for March 24 was around 1350 crores.
05:02So going forward, if this happens by the end of FY25, what is the kind of revenue uptick
05:08that you're expecting, first thing, and how will this also aid your margins?
05:14Yeah, unless we don't discuss about Basmati, I cannot explain that.
05:21You see, the Basmati in preceding years, it was $1200, MEP was imposed, and that was
05:30the period which caused a slowdown of the business of entire industry, it hit everyone,
05:39and now it is 950, it was brought down to 950 and we all clapped, it's good, very good.
05:47So now again, some of the varieties like 1509, which has already started arriving,
05:54it's an early crop, also comes from UP, and the price is as low as $750 to $800, how can
06:02we export at 950?
06:04So again, you see, it's the economics laws that play for the prices, and the government
06:12has to be proactive and very quickly take the decision, we are hearing 800 is recommended
06:18and is likely to come any day, but the kind of delays happen, we prove as a non-serious
06:27exporters world around, so we have to take quickly all these decisions.
06:33Understood.
06:34But you know, Rajiv, if you can quantify that for me, because you're also planning to add
06:39three new packaging units in Karnal, so overall, what is the kind of revenue uptake that you're
06:45expecting in FY25, so from this 1350, where will the revenue go by the end of FY25?
06:51Because had it been this $1200 restriction, MEP would not have been, it was government
06:59compulsion to keep the prices low for normal rice, so we can't comment much on that, but
07:08had it been smooth, my turnover of the year gone, must have been above 1400, which I achieved
07:16in the year under 23.
07:19So if everything goes well, we are likely to achieve somewhere around 1600 crore positive
07:29in the year to come, and we have targeted around 2000 crore revenue in two years.
07:38Got it, okay, so 2000 crore revenue target in the next two years, got it.
07:42And you know, you're also planning to explore into the spices business, any update there?
07:49What is the new thing that's happening there?
07:52Because we've seen regulatories coming in and actually taking ahead the spices business
08:01and seeing that there are a lot of regulatory breaches there.
08:04So what is the progress for you there, and what are you aiming at when it comes to spices
08:09business?
08:10No, no, we are not going to come in spices, because we are going to have a new unit in
08:17another three, four months in Gujarat, and we have possibility of exporting a couple
08:26of spices product from Gujarat, whatever is available.
08:37This clove nut is available a lot in Gujarat, and sesame seed is available, couple of spices
08:44are available.
08:45So that's an idea, because we have opportunity to start simultaneous business and we'll definitely
08:52do that.
08:53Understood, okay.
08:54Because we are exporting in 94 countries now, we have multiple range of customers, and all
09:00are in food item, all of them are, most of them are in spices and different food products.
09:06So the company intends to go only in food products, nothing else, because that's a ready-made
09:13thing for us.
09:14Right, okay.
09:15Well, Mr. Rajiv, thank you so much for taking our time and speaking with us at NDTV Profit
09:18and giving us those insights.