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Vardhman Q2FY15 net sinks from high depreciation costs
12
Nov '14
Despite a 16.26 percent revenue hike in the second quarter of fiscal 2014-15, impacted by higher depreciation and amortisation costs, net profit at Vardhman Textiles Ltd sank 48.4 percent, year-on-year.

The vertically integrated Indian textiles producer reported a steep 48.4 percent fall in net profit at Rs 91.70 for the second quarter of fiscal 2014-15 as against Rs 177.81 crore in the corresponding quarter of 2013-14.

Vardhman said pursuant to a new act, it had to recalculate the remaining useful life of its fixed assets, which drove depreciation and amortisation costs higher by Rs 33.15 crore, thereby, impacting profits.

Helped by capacity increase in yarns and fabrics, net sales at Rs 1487.54 crore in the reporting quarter expanded 16.26 percent from Rs 1279.51 crore in the prior year fiscal quarter at the North India based textile group.

However, high cotton prices and low yarn prices drove EBITDA margins down to 17.59 percent in the quarter under review at Vardhman Textiles from 27.08 percent in the second quarter of 2013-14.

Spanning over 22 manufacturing facilities in five states across India, the Vardhman Group has interest across yarn, greige and processed fabric, sewing thread, acrylic fibre and alloy steel. (AR)

Fibre2fashion News Desk - India

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