Home / Knowledge / News / Textiles / Going gets tough for JCT amid working capital crunch
Going gets tough for JCT amid working capital crunch
Dec '13
At a time when most of the domestic textile firms are gearing up to expand as demand from major markets like US & Europe is showing signs of revival, the Punjab-based JCT Ltd is struggling to see the light at the end of the tunnel. 

The Thapar Group firm reported a net loss of Rs 87.77 crore in 18 months to September 2013, weighed down by rising finance costs, working capital crunch and lower capacity utilization. The cash-strapped firm, operating in two distinct businesses – cotton, synthetic & blended textiles and nylon filament yarn—has been incurring operational cash losses since the financial year 2008-09, meeting its debt obligations out of working capital, leading to further pressure on capacity utilization.

Capacity utilization at JCT’s textile division remained at just 75 per cent and produced 5.53 crore meters of fabric during the 18-month period ended on 30th September 2013. Increased power rates in Punjab as well as adverse forex fluctuations led to higher input prices for the firm during the period while selling prices increased only marginally, leading to pressure on its margins.

In the Nylon filament yarn unit, the company was hit by prices of Caprolactum which increased from average of Rs 139.67 per kg in 2011-12 to Rs 146.16 per kg during the period. Hit by rising losses, the net worth of the company has also slipped into negative. The company has been barred by the Chandigarh High Court from creating any fresh charge on its assets or selling immovable assets after the company failed to redeem its Foreign Currency Convertible Bonds (FCCBs) on due date April 8, 2011.

Even as the company has restructured some of its debt and is in talks with majority of FCCB holders to convert their bonds of USD 12.93 million into equity shares, avoiding winding-up situation, the going would definitely not get easier as the company still has to revive its discontinued operations to achieve full capacity utilization. Moreover, it also faces competition in nylon filament yarn segment from countries like Vietnam and Taiwan due to their cost advantage.

Fibre2fashion News Desk - India

Must ReadView All

Textiles | On 8th Dec 2016

Cabinet okays reforms to boost jobs in made-ups sector

The Union Cabinet chaired by prime minister Narendra Modi has given...

Textiles | On 8th Dec 2016

R&D is key to textile industry’s growth: Kavita Gupta

Research and development is the key to the growth of the textiles...

Textiles | On 8th Dec 2016

Taiwan’s Everest Textile to invest $18.5 mn in US

Everest Textiles USA, a unit of Taiwan based Everest Textile Company, ...

Interviews View All

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Divyesh Mashruwala
Akshar Industries

Surat dominates foiling, embossing and pleating

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Larry L Kinn
Suominen Corporation

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

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer Prathyusha Garimella is known for blending...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Ritu Kumar
Label Ritu Kumar

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

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

December 2016

December 2016

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


Browse Our Archives


Advanced Search