However, revenues surged 21.51 percent to Rs 7.54 billion compared to Rs 6.20 billion in quarter ending June 30, 2011. Indo Rama attributes the negative growth in net profits primarily to rupee depreciation, which led to an increase in cost of importing raw materials.
Profits after tax were also impacted due to lower margins and mark to market losses of Rs 1.05 billion in the quarter as rupee moved down by nearly Rs 5 against the US dollar at the beginning of the reporting quarter.
Mr OP Lohia, CMD of Indo Rama Synthetics said, “Persistent focus on customers and product quality has ensured our impressive sales performance. Ongoing efforts at cost optimization and an improvement in market sentiments should help us deliver superior performance in the coming quarters”.
He also attributed the hike in revenues to a 40 percent surge in demand from overseas markets in the quarter from a year earlier. In the same quarter domestic demand too rose by 15 percent, he added.
Discussing their expansion plans, he said, “Indo Rama is expanding Draw Texturized Yarn (DTY) capacity from 64,800 tons per annum to 98,145 tons per year, by adding 14 new machines of which 7 have already been commissioned. The balance will be operational by September 2012”.
There was also an increase in costs, as consumption of furnace oil rose, due to the forced shutdown of two heaters of coal fired HTM plant. Indo Rama revealed that one of the heater’s has been restarted while the second is still under maintenance and likely to restart in December 2012.
Indo Rama Synthetics has an integrated manufacturing complex near Nagpur in Maharashtra with a capacity to produce 610,050 tons per annum of polyester staple fibre (PSF), filament yarn, Draw Texturized Yarn, Fully Drawn Yarn and textile grade chips.
Fibre2fashion News Desk - India
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