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

Textiles | On 25th May 2017

Huntsman and Clariant to have merger of equals

Huntsman Corporation and Clariant have announced that their boards of ...

Courtesy: CBRE

Apparel/Garments | On 25th May 2017

European cities preferred for retailer expansion: CBRE

European cities were the preferred new destination for international...

Apparel/Garments | On 25th May 2017

Guess records $458.6 million revenue for Q1 2018

For the first quarter of fiscal 2018, the net revenue of American...

Interviews View All

Asim Dalal
Indo Count Retail Ventures

Today, there is no other emerging market as India, "we make in India and...

Abhimanyu Singh Rathore & Barbara Anna Kosiorek
Kannbar

‘Blending cultures is the true beauty of fashion, where one’s imagination...

Cyril Pereira
Reed Exhibitions India, organiser of Asian Machine Tool Exhibition 2016

'Major problem in the textile machinery manufacturing industry is the lack ...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Robert Brunner
Devereux

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

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

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

news category


Related Categories:
May 2017

May 2017

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

SUBSCRIBE


Browse Our Archives

GO


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