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Alps Industries Q2 profit remains flat
16
Jan '14
Given the continued slowdown in global economy, coupled with increase in raw material and inventory cost, India-based home textile manufacturer Alps Industries’ earnings remained under stress for the second consecutive quarter ended September 30, 2013.
 
The consolidated net loss of the manufacturer of yarn, home textiles, readymade, technical textiles and vista fashions, trimmed to Rs 25.45 crore for the three months ended 30 September 2013 from Rs 25.90 crore in the same period a year ago. 
 
The financial performance of the company is on improvement trend which is evident from the fact that the profit from ordinary activities before financial cost has increased to Rs. 2.85 crore during the period under review in comparison to Rs. (1.36) crore in previous year. 
 
The loss has decreased due to various reasons like increase in the margin of yarn, down trend in cotton prices and betterment of utilization of capacity.
 
During the three months under review, the company witnessed a 29.66 per cent increase in its total revenue which stood at Rs 213.79 crore as compared to Rs 164.88 crore in the same period a year ago, driven by rise in export of yarn, which continues to be the flagship business.
 
However, increasing raw material cost, rising power tariff, high volatility in cotton and yarn prices, and sudden glut in the domestic and international market had adverse financial impact on the company.   
 
Raw material, which constitutes a significant percentage of the company’s total expenses, increased significantly to Rs 156.80 crore during Q2 2013-14, as against Rs 113.98 crore in a year ago period. 
 
During the quarter, the company has close down the operations of Kashipur and Jaspur Units taken on lease from SIDCUL, with immediate effect.
 
Considering the change in scenario, recent performance and trends of the company as well as overall industry outlook, the management believes that business will remain sluggish, in line with the outlook for the global economy. 
 
With the US and EU accounting for the majority of Indian textile exports, the economic health of these countries will put pressure on Indian textile exports in the short- to medium-term. 
 

Fibre2fashion News Desk - India

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