Lack of water drown Morarjee textiles Q1 profit

30 Jul '07

2 min read

Morarjee Textiles Limited the textile company of the Ashok Piramal Group, has posted a loss of Rs. 590 Lacs on a consolidated basis in the first quarter ended June 30th 2007.

Standalone loss stood at Rs. 601 Lacs. Consolidated sales were at Rs. 5796 Lacs while standalone sales for the quarter were Rs. 3630 Lacs.

The performance in Q1 2007 was affected by the interruption in water supply due to the replacement of a municipal water pipe by the state authorities in the MIDC area at Nagpur.

Production at the units was halted for 40 days in this quarter due to the lack of water, which is one of the most critical resources in textile production.

"This has been a tough quarter for the company. In several industries, the loss of water could lead to notional losses and decrease in production. However in textiles, the loss extends further to the material on machines in various stages of processing which have to be discarded adding to the overall loss in production and cost."

"However we do expect the water supply issues to be resolved and will be back on track in the second quarter." said Harsh Piramal, Executive Vice Chairman, Morarjee Textiles Limited.

The rupee appreciation has also had an impact on the bottom line. Various fiscal measures are being implemented to insulate future profits from a stronger rupee.

"We expect the Indian currency to remain in the current range, and we have already begun discussions with ourcustomers to neutralise the impact of future rise of the dollar on our bottomline. In addition, through our Men's Cub acquisition, we are lowering our dependency of the dollar by making inroads in the markets of Europe and Japan." he added.

More Morarjee Textile News... More Textiles News - India...