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Alok to generate higher ROC in near future
Mar '11
Alok Industries plans to increase the proportion of polyester vis-à-vis cotton to 50:50 in the next two years from the current 25:75, to generate a higher return on capital (ROC) yield, says a top official.

Alok Industries Ltd., the Rs 43.11 billion turnover (2009-10) vertically integrated Mumbai-based textiles company, is now in the final stages of capacity expansion phase, which had begun six years ago.

In all the company has invested Rs 70 billion capex across all its textile verticals beginning from home textiles to clothing. Against the industry average of 3-5 percent, Alok has spent around 12 percent of its revenue to service the debt every quarter.

Mr Sunil Khandelwal – Chief Financial Officer (CFO), however, is very optimistic about the future. He says, “Our operations will generate higher revenues in the next 2-3 years. At present too, we are comfortably positioned.

“As far as the ROC is concerned, its about 13-14 percent as of now and we are targeting to reach 20 percent in next two years, which will be possible mainly due to full output from the existing change in product mix, by shifting to a higher proportion of polyester where ROI is very high”.

Informing about the capex investments, he said, “The capex is more or less complete now and from now onwards, only a small balance sheet will be there. The impact will be felt on; our operations, which will be maximised; debt will start coming down and finally our interest rates would start coming up as an input”.

Fibre2fashion News Desk - India

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