Comments
Polyester manufacturer Indo Rama Synthetics (India) Ltd recorded a 77 per cent drop in its net profit to ₹4.91 crore in the first quarter of 2015-16 compared to ₹22.05 crore earned in the same period of the previous year.
The lower profit is mainly due to a fall in polyester prices and a drop in international demand, according to company officials.
“Volume-wise our sales have actually gone up by 5 per cent during the quarter. The lower profits are mainly due to a drop in prices of our product, which is largely because of a fall in international oil prices. This will persist in the next quarter as well, but net sales figures are likely to improve from the third quarter,” O. P. Lohiya, Chairman & Managing Director, Indo Rama Synthetics, told BusinessLine .
The company reported lower net sales of ₹ 627.92 crore in the April-June 2015-16 period as compared to ₹ 705.27 crore in the corresponding period of the previous year. The sales volume for the quarter increased to 79,088 tonnes as compared to 75,573 tonnes in the corresponding period of the last financial year, reflecting an increase of 4.65 per cent on quarter basis.
While domestic sales of the company increased during the first quarter of the fiscal, it was exports that took a big hit. “International demand is under pressure. Exports are coming down and impacting our margins,” Lohiya pointed out.
For the quarter ended June 30, 2015, the company’s net revenues stood at Rs 642.48 crore as against ₹718.47 crore in the corresponding quarter of the previous year. The company’s EBIDTA (earnings before interest, taxes, depreciation, and amortisation) in the first quarter was ₹32.55 crore compared to ₹43.67 crore in the same period last year.
With domestic cotton prices “bottoming-out’’, Indo Rama is hopeful of higher demand for its synthetic items in the coming months. “Higher cotton prices in the domestic market and the steady fall in polyester prices over the past eight months are bound to result in higher demand for our product. It is likely to get reflected from the next quarter,” Lohiya said.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.