Net sales up at Sangam (India); Board approves expansion project

09 Feb '11

4 min read

Bhilwara-based, Sangam (India), one of the largest manufacturers of polyester-viscose dyed yarn in India, announced its financial performance for the third quarter and nine months ended as on December 31, 2010. During the quarter the company posted highest ever revenue and operating margins.

Management Comment

Commenting on the development, Mr. R.P. Soni, Group Chairman, said, "Increased volumes and better realisation helped the company to post outstanding performance during the quarter. Moreover, we managed to pass on the hike in raw material cost to the end customers-"

"Going forward, we expect the demand for PV yarn segment to grow at around 8-9 per cent on account of higher demand following a change in fashion trend and increased demand from Institutional buyers. In order to cater this demand we plan to focus more on value added products like fancy denim, technical textile fabrics and knitted fabrics".

Expansion Plan

The company's Board approved the Rs 171 crere expansion-cum diversification plan to set up additional Denim capacity of 16 million meters per annum, 7200 metric tons of texturing yarn, install 2,304 rotors and 1,200 MTPA knitting capacity in Bhilwara. This expansion project would be funded through internal accruals and debt.

The project is expected to be completed by December 2011. On completion of this expansion project, the company hopes to enter value added products and targets to generate Rs 250-275 crore additional annual revenue.

Meanwhile, the company has completed its Rs 35 crore Denim capacity expansion project in November 2010.

(3MFY 2011 -October-December 2010); (9M FY 10 - October - December 2009)

• Net sales grew by 35.74 per cent to Rs 288.59 crore for the quarter ended December 31, 2010 compared to Rs 212.61 crore in the corresponding quarter previous year.
• Net profit surged by 412 per cent to Rs 18.45 crore compared to Rs 3.60 crore in the corresponding quarter previous year for the ended December 31, 2009.
• For the period under review EBIDTA grew by 86.44 per cent to Rs 55.58 crore compared to Rs 29.81 crore in the corresponding quarter previous year.
• EBIDTA margins Improved by 524 basis point to 19.26 per cent as against 14.02 per cent. Due to Strong demand coupled with better price realisation
• On equity capital of Rs 39.42 crore, the company has posted an EPS (fully diluted) R5 4.68 for the period end December 31. 2010.

9MF11 Performance

(9MFY 2011- April- December 2010); (9M FY 10 - April - December 2009)

• Posted 30.55 per cent rise in net sales at Rs 813.16 crore for the period ended December 31, 2010 compared to Rs 622.87 crore in the corresponding period previous year.
• Net profit for period under review up 276.52 per cent at Rs 35.28 crore as against Rs. 9.37 crore in the corresponding period last year.
• .On equity capital of Rs 39.42 crore, the company has posted an EPS (fully diluted) Rs 8.95 for the Nine months ended December 31. 2010.

Sangam (India) Ltd

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