Alok Industries: Q4 shows uptrend; eyes retail expansion

07 May '09

5 min read

It has been almost a half year now the industry is confronting with economic catastrophe world-over. Finance arms of the companies and the economy planners have been busily engaged addressing the cascade of issues viz finance crisis, regulatory/legislative changes, business interruption, increasing competition, commodity price risk, cash flow/liquidity risk, distribution or supply chain failure, etc. At the rear of such a situation, the bygone financial year 2008-2009 ended for companies domestical as well as global, leaving them with outcomes proportionate to the decision and strategies they have applied during this year.

In recently announced results of one of the leading textile players of India: Alok Industries Ltd, Net sales for Q4- FY09 grew by 25.33% to Rs. 908.39 crore and Operating Net Profit rose by 16.76% at Rs. 71.19 crore.

In an exclusive colloquy with fibre2fashion.com team, Mr Sunil Khandelwal, CFO, Alok Industries Ltd, retrospects the success factors for this bygone fiscal year and divulges on strategic plannings for following year as he addresses a few questions as below:

F2F: Let us begin talk with a retrospection on bygone financial year; what according to you were some crucial decisions for your company?

Mr Khandelwal: The company's strategy to expand / modernise its capacities in view of removal of quotas, during the last four years, has helped in building large capacities with backward and forward integration.

The vendor consolidation happening in US and Europe has increased the number of orders / enquiries to the company. Because of our economies of scale and competitiveness, it would be difficult for any vendor sourcing from India to ignore ALOK.

The company's decision to diversify into technical textiles / work wear fabrics, which has applications in Defence, Oil exploration companies, hospitality industry etc. has benefitted the company.

In order to increase the product range, the company has ventured into Terry Towel. Towards the end of last financial year, the company has commenced production of Terry Towel plant. The company had launched Rights issue of Rs. 450 crores in March 2009,which has now been completed successfully. This would improve the debt equity of the company.

F2F: Net sales for Q4- FY09 grew by 25.33% to Rs. 908.39 crore and Operating Net Profit rose by 16.76% at Rs. 71.19 crore. As a CFO, how do you view this growth? Can you please enumerate about the determinants behind?

Mr Khandelwal: The strategy to expand has helped the company. The additional capacities added during the last year and backward integration into spinning unit,diversified product range are the major factors in increasing the sales and profit.

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