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Sutlej Textiles 9M FY'14 net profit skyrockets 82%
28
Jan '14
Sutlej Textiles and Industries Ltd., (STIL), a leading manufacturer of value added synthetic, cotton and blended yarns, fabrics & home furnishing has announced its results for the quarter and nine months ended 31st December 2013.

The company recorded net profit of Rs. 111 crore during the nine months of the current financial year as against Rs.61 crore generated during corresponding period last year, registering a growth of 82%.

The revenue of the company expanded from Rs. 1,248 crore garnered during nine months ended December 31, 2012 to Rs. 1,399 crore during the current period ending December 31, 2013, an increase of 12%. The EBITDA is Rs. 236 crore for the nine months ended December 31, 2013 as compared to EBITDA of Rs. 174 crore for the nine months ended December 31, 2012 showing a growth of 36%. 

Key Developments
Strong Operational and Financial Performance
-Improved profitability on the back of operational and financial efficiencies
-Better realizations and higher production of units resulted in revenue expansion
-Margin progression on the back of improved cost efficiencies
-Profitability enhancement on account of lower interest outgo and improved cost management

Capacity additions under implementation
-Spinning capacity is being expanded by 30,672 spindles; resulting in higher production of value added yarns (Cotton Mélange)
-Project Budget: Rs. 175 crore.
-Achieved Financial Closure with internal accrual of Rs 44 crore.
-Expansion is on schedule – commercial production likely to commence by Q3 FY 15.
-Further modernization – cum-up gradation of existing projects – will result in cost reduction

Credit Rating: Upgrade
-Long Term Bank Facilities: Upgraded from “CARE BBB” to “CARE A-”
-Short Term Bank Facilities: Upgraded from “CARE A3+” to “CARE A2+”

Rewards to shareholders
-In line with Company’s philosophy of rewarding its shareholders, the Company allotted bonus shares in the ratio 1:2 (June’2013)
-Consistent track record of dividend paying since incorporation.

Commenting on the results, Mr. C.S. Nopany, Chairman, Sutlej Textiles and Industries Limited said “Our strategy to focus on manufacturing niche products in the yarn category namely specialty & value added yarns is reflected in sustained improvement in operational and financial performance even in a protracted slowdown prevailing in the macro environment.    

Our constant endeavor towards maintaining a high degree of cost efficiencies has also enabled us to soften the impact of cyclicality associated with the business. Favorable domestic and international factors in general have aided the sector by keeping the raw material prices steady during the period. In addition, our innovative R & D enables us to broaden our sourcing capabilities, thus strengthening our ability to mitigate volatile raw material prices over the years.

While the economy at present continues to reel under pressure, we are optimistic that the Company’s current implementation of capacity addition and modernization will further consolidate its position within the industry and enable us to deliver healthy financial performance going forward.”

Sutlej Textiles

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