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Listed textile companies post huge losses
20 Oct '09
2 min read
According to an analysis made of the textile companies, listed on the stock exchanges of the countries, profits of these enterprises have plunged by nearly 57 percent, due to the effects of the recessionary trends and shortages of energy and gas.
These companies though do not represent the textile sector as a whole; but, they do broadly symbolize the industry and does give an indication of the rot which has set into the sector, in the last one year.
Experts aver that, other than the recessionary trends, the biggest factor which has affected the textile industry to a great extent are the twin shortages of gas and electricity, which has hampered smooth running of the companies.
Despite a revenue jump of 13 percent, and also an improvement in gross margins to 12.7 percent, spinning segment's earnings turned negative posting a loss of Rs 962 million. A hike in financial charges completely wiped out the gross margins.
The weaving segment too followed the trend set by the spinning sector and here again, despite an increase of 16 percent in net sales, the segment recorded huge losses. The segment posted net loss of Rs 111 million compared to a loss of Rs 389 million a year before.
These companies though do not represent the textile sector as a whole; but, they do broadly symbolize the industry and does give an indication of the rot which has set into the sector, in the last one year.
Experts aver that, other than the recessionary trends, the biggest factor which has affected the textile industry to a great extent are the twin shortages of gas and electricity, which has hampered smooth running of the companies.
Despite a revenue jump of 13 percent, and also an improvement in gross margins to 12.7 percent, spinning segment's earnings turned negative posting a loss of Rs 962 million. A hike in financial charges completely wiped out the gross margins.
The weaving segment too followed the trend set by the spinning sector and here again, despite an increase of 16 percent in net sales, the segment recorded huge losses. The segment posted net loss of Rs 111 million compared to a loss of Rs 389 million a year before.
Fibre2fashion News Desk - India
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