Sarla Performance Fibres delivers sterling Q1 results

Sales have surged from Rs 424.2 million in quarter ending June 2011 to Rs 568.5 million in the just ended quarter. Net profits too have jumped from Rs 30.6 million to Rs 37.86 million. However when compared to the previous quarter ending March 31, 2012, they have fallen by a huge 23.5 percent.

When quizzed about posting a 34 percent hike in Q1 revenues and 23.5 percent rise in net profits, Mr Mahen Sheth, CFO at Sarla told fibre2fashion, “There is an increase in the volume of sales coupled with the USD appreciation”.

In the reporting quarter, Sarla has provided for foreign exchange fluctuation loss of Rs 30.2 million compared to a loss of Rs 1.6 million in the previous period on account of re-instatement of Foreign Currency Assets and Liabilities. This however has no effect on the operational profit of the company.

The quarter also witnessed the head of ‘other expenditure’ skyrocketing to Rs 179.2 million from just Rs 109.8 million, up by a massive 63 percent. Despite all this, Sarla Fibres was able to deliver a sterling performance in the quarter.

Mr Sheth is also very optimistic and confident of maintaining the same pace in coming quarters. He also expects that there will not be any significant changes in the market trends in the next few quarters, unless there is political instability.

Since Sarla operates in a niche segment - high tenacity specialized yarns, so he does not expect their performance to be affected by other local or global factors. He is also of the opinion that the Rupee-USD exchange rate has stabilized as of now.

Sarla Performance Fibres is installing two more new windmills at Sangli in Maharashtra of 2 MW each, which are expected to be commissioned by next month. He anticipates that the revenue generated from these windmills will increase margins considerably.

Sarla Performance Fibers Ltd is a 100% EOU engaged in the manufacturing and export of polyester and nylon textured, twisted and dyed yarns, covered yarns, high tenacity yarns and sewing thread.

Fibre2fashion News Desk - India