Polyester major Indo Rama Synthetics (India) Limited has suffered a net loss of Rs 14.69 crore in the second quarter (ended September 30) of the on-going fiscal, which is lower than the net loss of Rs 49.71 crore suffered in the same period last year.
It is the second consecutive quarterly loss for the company which is trying to cope with low polyester prices and competition from China.
The silver lining to the dark cloud, though, is the continued increase in sales volume, according to the company.
“Our sales volumes have gone up both in this quarter and the previous one. It will hopefully start reflecting in the results,” said O P Lohia, Chairman & Managing Director, Indo Rama Synthetics (India) Ltd, in an interaction with BusinessLine.
The sales volume for the quarter increased to 93,708 tons as compared to 80,693 tons in the corresponding period of last year, reflecting an increase of 16.13 per cent. The increase in volumes in the first half of the year is 12 per cent, Lohia said.
For the quarter ended September 30, 2016, the company achieved net revenue of Rs. 766.16 crore as against Rs. 695.03 crore in the corresponding quarter of the previous year. The operational EBIDTA (earnings before interest, taxes, depreciation, and amortization) for the quarter was Rs. 3.47 crore as compared to Rs. 0.60 crore in the corresponding quarter of last year.
Lohia said that with cotton inventory coming down, cotton prices are expected to rise further which would lead to further rise in demand of polyester. “Rising volumes of polyester shows that buyers are shifting towards it. Sometimes margins are kept low because of factors such as China sending low-priced shipments to India,” he said.
Rising exports of polyester and the government’s increased focus on the textile sector augured well for polyester, Lohia added.