For the third fiscal quarter ended December 31, 2015, net profit at Sutlej Textiles and Industries Ltd (STIL), a producer of value added dyed yarns and home textiles slid 45 per cent year on year.
Sutlej Textiles said in the third quarter of fiscal 2015, its net profit plunged to Rs. 22 crore from Rs. 40 crore in the corresponding quarter of fiscal 2014.
For the reporting quarter, revenue decreased marginally to Rs. 459 crore as against Rs. 464 crore in the prior year quarter.
EBITDA at Sutlej Textiles also declined steeply at Rs. 67 crore in the quarter under review compared to Rs. 86 crore in the same quarter of previous fiscal year.
Consequently, earnings per share in the third quarter of fiscal 2015 also fell sharply to Rs. 13.32 as against Rs. 24.35 in the third quarter of fiscal 2015, down also a massive 45.29 per cent.
Chairman CS Nopany said, “Our focus in the value added dyed yarn segment has enabled us to maintain business momentum despite the severe challenges being faced by the Textile Industry.”
“In addition, renewed focus on increasing presence in Home Textile segment should help improve our product mix going ahead,” he added.
“Despite some near-term headwinds, we believe our efforts towards optimising utilisation levels, adherence to cost discipline along with strategic initiatives should help us deliver growth going forward,” he noted.
During the quarter, Sutlej commenced commercial production of value added cotton mélange and cotton blended dyed yarn from its additional 31,104 spindles at its Chenab Textile Mills, Kathua unit.
Total yarn spinning capacity now stands at 293,544 spindles, of which 96,000 spindles are utilised to manufacture cotton mélange and cotton blended dyed yarn.
“Onset of operations from this additional capacity will result in improving the proportion of high margin niche cotton mélange and cotton blended dyed yarn product in the overall product mix,” Sutlej said.
“Further, Sutlej said it has invested Rs. 55 crore as on December 31, 2014 out of Rs. 80 crore earmarked for FY 2015 towards technology up-gradation and debottlenecking, etc.
It is in the process of expanding operations in its home textiles division at its plant in Gujarat. Post completion, capacity will zoom to 9.6 million metres per annum from 2.5 million metres currently.
The expansion project will cost Rs. 88.50 crore and work on the project is progressing as per schedule and is expected to be complete by fiscal 2016.
According to Sutlej, increased presence in home textile segment will result in further strengthening of its end to end operations, yarn to home textile.
Fibre2fashion News Desk - India