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Better
days ahead
The
recent rally in textile counters was overdue for some time now.
The domestic industry is certainly turning around, if one goes by
the financial performance of textile companies for the fiscal ended
March 2003. Importantly, most of the majors have announced encouraging
results in terms of sales, profits and operational efficiency. The
improvement has been witnessed across the sectors. The industry,
after implementation of several efforts, has managed to reduce the
cost of production through operational efficiency. Besides, government’s
recent policy measures has given the industry a right kind of platform
to perform. One can easily say now that the sentiment has improved
considerably and that has helped the industry to face the challenges
more effectively.
Arvind
Mills has set an example as to how a proper restructuring can pull
a company out of a quagmire. The company has posted 280 per cent
rise in the net profit at Rs 38 crore for the fourth quarter ended
March 31, 2003. Net sales saw 15 per cent growth at Rs 390.96 crore.
For the full financial year ended March 31, 2003, Arvind reported
a net profit of 129 crore, writing off the accumulated loss of Rs
105 crore. The company’s sales stood at 1,479 crore, which
includes 50 per cent of export contribution.
Raymond
has reported a higher net profit at Rs 90.26 crore in the fiscal
2002-03 as against Rs 88.11 crore in the previous fiscal. Despite
stiff competition, the company has successfully consolidated its
position as a market leader and future seems to be quite bright.
Raymond’s denim division expanded its capacity to 15 million
metres from 10 million during the second quarter of the fiscal 2002-03
and subsequently increased to 20 million by the end of the fiscal.
The recent cut in import duty of wool as also rationalisation of
other duty structure will boost the margins further in the current
fiscal.
Ginni
Filaments has recorded a net profit of Rs 3.59 crore during the
fiscal ended March 2003 after having made a loss of Rs 2.40 crore
during the fiscal ended 2002. Ginni is likely to cope up the future
with a much stronger performance.
Mahavir
Spinning, another industry major, also notched up impressive figures
for the nine months ended December 2002. For this period, the company
recorded a net profit Rs 32.33 crore on total sales of Rs 618 crore.
The
recent performance clearly shows that the industry is gradually
turning around. The duty rationalisation drive will help the industry
perform much better in the coming years. Globally, also things are
looking up except for a few hiccups. With all the factors falling
in line, there is no reason that the textile industry cannot come
out of its recent sluggishness.
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