Sutlej Textiles and Industries Ltd. (STIL) has recorded its highest-ever net profit of Rs. 131 crores during the year ended March 31, 2014, as against Rs. 77 crores in the previous year, representing a growth of 70 per cent driven by improved operational efficiency and lower interest outgo.
The revenue of the company expanded to Rs. 1,881 crores during the year as against Rs. 1,680 crores in the previous year, an increase of 12 per cent on account of improved realisations and higher offtake of value-added products. The EBITDA for the period stood at Rs. 306 crores (Rs. 234 crores), an increase of 31 per cent driven by improved spindle efficiency and cost optimisation.
Commenting on the results, Mr. C.S. Nopany, STIL Chairman, said: “During the just concluded financial year we witnessed an overall improvement in Sutlej’s operations. Profitability was buoyed mainly as a result of optimal spindle utilization, thrust on value-added products and prudent cost management. In addition, our in-house R&D spins out innovative qualities and strategies for optimization of product cost, resulting in improved operational performance of the business. Going forward, the commissioning of the new 30,672 spindles for cotton mélange value-added yarns will add significant value to the company. While the business environment is expected to be moderate in the near term, we are optimistic that the company with its improving fundamentals will be able to deliver sustained performance in the coming years.”
Spinning capacity will be expanded by 30,672 spindles; resulting in higher production of cotton mélange yarn, a value-added product. The company achieved financial closure with internal accruals of Rs. 44 crores.
Expansion plans are on schedule. The company has incurred about Rs. 54 crores till March 31, 2014, and all required plant and machineries, equipment’s etc., tied up. Commercial production is likely to commence by October next.
In addition, STIL intends to further invest towards technology upgradation, debottlenecking, etc., amounting to about Rs. 80 crores in 2014-15, leading to increase in efficiency and cost reduction.
The Board of Directors has recommended, subject to approval of shareholders, a dividend of Rs. 8 per fully paid-up equity share of Rs. 10 each aggregating Rs. 15.33 crores, including dividend distribution tax. In line with the company’s philosophy of rewarding its shareholders, it allotted bonus shares in the ratio 1:2 (June 2013).
STIL has also been recipient of numerous prestigious Awards. The recent ones are the Niryat Shree – Gold Trophy Award for its export performance in 2009-10, the Gold Trophy from SRTEPC for fabrics export, and the Silver Trophy from SRTEPC for the second best export performance in the spun yarn category.