While GHCL had seen good quarterly results in their Q1, superstar investor Ashish Kacholia had some interesting questions to top management on pricing pressures they were potentially facing in the slowdown, specifically the slowdown in demand for soda ash. Managing Director RS Jalan offered some hard numbers in response, noting that in Q2 the company was "expecting approximately around 2% drop in its selling price and maybe a quarter later probably another 2% so broadly we are talking about approximately around 2% plus 2%."
However, Jalan noted, GHCL was benefiting from the fact that "raw material prices are also on the lower side, and our understanding is that probably we will be in a position to secure our margins, because of higher volume of production as well as the advantage of internal efficiencies".He concluded, "I think we will be able to maintain our margin at the same level of last year what we have achieved." Jalan said that GHCL is expecting 10% volume growth in FY20 in soda ash.
Jalan noted that for the textile business, they expected to see a 11% margin for the FY20 year, and a recovery in margins for the spinning business. Jalan also said that they were hoping for margin improvements in textile and spinning with the launch of online brands, which would improve their reach in the UK and US markets, and compete with smaller players who have made inroads into the market via the internet.