The Hindu Business Line : Gokaldas Exports negotiating higher price for orders

Bangalore, July 31 Gokaldas Exports may negotiate higher price for future orders as one of the strategies to mitigate the continued pressure from stronger rupee against dollar.

As the company reported a dip in its net profit for the quarter ended June 30, the Executive Director, Mr Rajendra Hnduja, said: “The strong rupee position would continue for sometime and hence to combat the rise of the rupee, we are trying to mitigate this by four methods.”

Declining Growth

He said while price front would be explored, the company would also embark on improving the productivity. The company would also focus on efforts for reducing manufacturing costs and use imported raw materials from low cost sources and manufacture more value-added products where competition was less fierce.

Although the Gokaldas Exports managed a reasonable performance even amidst the industry trend of declining growth due to the foreign exchange drawback, the company had declined some orders during the first quarter of the current fiscal due to price factor, Mr Hinduja said.

The company’s profit after tax during the first quarter declined by 22 per cent to Rs 10.5 crore (Rs 13.5 crore). Its gross profit had shrunk to Rs 11.6 crore (Rs 14.9 crore).

Mr Hinduja said: “We decided to choose the option of higher realisation through better price and rejected orders worth about Rs 50 to Rs 60 crore.” However, he added, the company succeeded in getting a higher price for some portion of the Rs 250 crore order for the second quarter of financial year 2007-08.

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