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Sangam (India) net profit up 43% in Q1 FY'13

03
Sep '12
Sangam (India), one of the leading textile companies in Polyester Viscose (PV) dyed yarn segment in India, reported a 21.67 per cent rise in net sales at Rs 412.54 crore for the first quarter ended June 30, 2012 (Q1FY13) compared to Rs 339.05 crore in the corresponding quarter previous year (Q1FY12). EBIDTA margin improved by 151 bps (basis points) y-o-y to 12.5 per cent. While the raw material cost as a percent of sales were 52.2% in Q1FY13.
 
During the quarter, the company's major raw materials - polyester staple fibre and viscose staple fibre - declined by 1.5% and 1% respectively. But cotton yarn prices increased by 6-7% giving a boost to PV yarn realisations. This along with a decrease in other expenditure led to an improvement in operating profitability.
 
Net profit during the quarter increased by 42.83 per cent to Rs 9.77 crore from Rs 6.84 crore in the corresponding quarter in the previous year. The company reported a earning per share of Rs. 2.48 compared to Rs. 1.74 in the quarter ended June 30, 2012.
 
Operational highlights
 
As a part of expansion plan, the company has set up a two lines of denim for 8 million each. The first line commenced production in November 2011, while the second line commissioned recently. The company has installed 2,304rotors for open ended spinning along with of 3,000 mtpa knitting capacity and 7200 mtpa texturising yarn capacity at its existing facilities at Bhilwara, Rajasthan. The Company has also modernised its processing division by replacing new processing machines. The Rs. 180 crore expansion project has been financed through a mix term loan and internal accruals.
 
Commenting on the results, Mr R P Soni, Chairman, Sangam (India) said, "Our performance reflects our belief in our strategy to focus on value-added products, leading to improved realisations. This has enabled us post good numbers despite a visible slowdown in Indian as well as global economy. Going forward, the full impact of our expanded capacities will further boost our margins and thereby ensure sustained growth for the company".

Sangam (India)


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