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 28th Apr 2017

Fix 5% GST rate for textile goods: Textile bodies

Uniform levy of 5 per cent Goods and Services Tax (GST) on all...

Textiles | On 28th Apr 2017

India lifts CVD imposed on Nepali Jute goods

The countervailing duty (CVD) that was imposed on Nepali jute...

Courtesy: Williamsburg Garment Company

Fashion | On 28th Apr 2017

'We have grown by staying small & maximising efforts'

The easiest way to go out of business is to be too big or expand too...

Interviews View All

Claudia Kersten
Global Organic Textile Standard

‘GOTS is a very efficient supply chain management tool, especially for...

Anshul Sood

‘Indian footwear market is nascent and largely a trend follower’

Abhishek Samdaria

GST will certainly reduce a lot of paperwork in future

Mohammad Hassan
Biax Fiberfilm

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

Suresh Patel
Sidwin Fabric

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

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Robert Brunner

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

Sonam & Paras Modi

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

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

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


news category

Related Categories:
April 2017

April 2017

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


Browse Our Archives


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