Spentex Industries H1 profit slumps 40%

09 Jan '14

2 min read

In the backdrop of continued slowdown in global economy, coupled with increase in power tariff and high volatility in cotton & yarn prices, India-based textile firm Spentex Industries saw business taking a hit in the first six months of current financial year ended September 30, 12013.

Engaged in manufacturing of yarns, the company reported sharp decline of 40 per cent in its standalone net profit for the six months ended 30 September 2013 at Rs 2.74 crore from Rs 4.57 crore in the same period a year ago.

During the six months under review, company witnessed a negative growth due to increase of raw material cost, and interest burden. There were other challenges too, such as increase in power tariff, high volatility in cotton and yarn prices, sudden glut in the domestic and international market, fluctuating global commodity prices, and low demand which had their own adverse financial impact on the company.

Raw material and power cost, which constitute a significant percentage of the company’s total expenses, increased significantly to Rs 403.46 crore and Rs 47.64 crore respectively during H1 2013-14.

However strong integrated business model and testimony of the quality of its projects along with value addition in products and spreading the customer base has helped company to improve its sales.

The company witnessed a marginal 1.2 per cent rise in its net sales which stood at Rs 584.63 crore from Rs 577.74 crore in the same period a year ago, driven by textiles trading segment, which continues to be the flagship business.

Total revenue of company stood at Rs 590.01 crore in the six months ended 30 September 2013 as compared to Rs 582.38 crore in the same period a year ago.

Further, considering the change in scenario, recent performance and trends of the company as well as overall industry outlook, the management believes that losses incurred in the past would reasonably be made good, in due course.

Fibre2fashion News Desk - India

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