Home / Knowledge / News / Textiles / High input costs hit Indian denim makers' Q2 net
High input costs hit Indian denim makers' Q2 net
10
Dec '13
Denim makers continued to feel the heat of rising input costs in second quarter ended September 2013. Higher input costs as a result of rise in cotton prices have dented the net profits of major denim players like KG Denim, Aarvee Denims and Exports, and Raymond in the Jul-Sep 2013 period as they failed to pass on the burden to buyers at a time when demand was already under pressure due to slowdown.

Rise in short staple cotton prices, which accounts for almost 50 per cent of input costs for denim makers, saw KG Denim’s ‘Cost of materials consumed’ rising by as much as 30 per cent year-on-year at Rs 100.74 crore in Q2 FY’14 as compared to Rs 77.8 crore a year ago. KG Denims, which manufactures over 20 million metres of denim per annum, said its net profit plunged over 40 per cent to Rs 3.31 crore in Q2 FY’14 from Rs 5.58 crore in Q2 FY’13, mainly due to higher input costs.

In similar fashion, Aarvee Denims and Exports Ltd reported a decline of sharp 56 per cent in net profits for the quarter ended September 2013 at Rs 7.5 crore versus Rs 17.28 crore in the year ago period. The company said its bottom-line was hit by both rise in input costs as well as pressure on sales.

Raymond Ltd, which manufactures denim in joint venture with UCO NV of Belgium, said its EBITDA margins from this business slipped 20 per cent to Rs 23 crore from Rs 28 crore in the year ago period, on account of high input costs.

Sustained input price increases, coupled with rising interest rates over the last two years against the backdrop of global economic slowdown, has put significant pressure on denim makers ‘margins. Against this backdrop, the depreciation of the rupee has further pushed up input costs and is forcing companies to minimize their losses while increasing sales in an intensely competitive environment.

Fibre2fashion News Desk - India


Must ReadView All

Pakistan govt notifies 50% duty drawback on exports

Textiles | On 21st Oct 2017

Pakistan govt notifies 50% duty drawback on exports

The Pakistan government has notified the ‘Duty Drawback of Taxes...

Ghana sets up task force to clamp down on textile piracy

Textiles | On 21st Oct 2017

Ghana sets up task force to clamp down on textile piracy

Ghana’s ministry of trade and industry has set up a taskforce to...

Courtesy: Coach

Fashion | On 21st Oct 2017

US company Coach to change name to Tapestry from Oct 31

Coach Inc., a New York-based house of modern luxury accessories and...

Interviews View All

Representatives
Textile & apparel industry

GST is a complicated and lengthy process

Kaizad Hansotia
GetNatty

Competition is the best thing that can happen to a startup

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Liz Manning

<div><b>Liz Manning</b>, Business Development Manager at Catexel, has...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Anisha Chaudhari
Threads & Shirts

Threads &amp; Shirts is a freshly-tailored concept providing men/women a...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

October 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
77.1%
No
12.9%
Skip
10.0%

Total Votes: 70

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.4%
No
28.6%
Skip
10.0%

Total Votes: 70

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
85.7%
No
10.0%
Skip
4.3%

Total Votes: 70

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
75.7%
No
11.4%
Skip
12.9%

Total Votes: 70


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search