Sutlej Textiles and Industries Ltd.’s (STIL) revenues for the quarter ended September 30, 2014, stood at Rs. 459 crores as against Rs. 492 crores during Q2 FY14, while on a half-yearly basis the company’s revenue stood at Rs. 951 crores vis-à-vis Rs. 935 crores during H1 FY14. Topline performance during the quarter moderated due to sluggish demand primarily on account of falling raw material rates.
PAT for the quarter stood at Rs. 30 crores (Rs. 43 crores), while on a half yearly basis PAT stood at Rs. 66 crores vis-à-vis Rs. 71 crores.
Commenting on the results, Mr. C.S. Nopany, STIL Chairman, said: “Our strategy of focusing on niche value-added products has helped us reduce the impact of the challenges faced by the sector during the quarter. Going ahead, the commissioning of additional value-added cotton mélange yarn spindles, coupled with the ongoing expansion project to scale up the production of home textiles and our efforts to further improve the product-mix, should help the company deliver sustainable performance in the long term.”
The company started commercial production of its expansion project of 31,104 spindles to manufacture value-added cotton melange and cotton-blended dyed yarn at its unit, Chenab Textile Mills, Kathua (J & K), from November 1. Post this expansion, the company’s total yarn spinning capacity stands at 292,840 spindles, of which 96,720 spindles are utilized to make cotton melange and cotton-blended dyed yarn. The rest of the spindles are utilized for producing synthetic dyed yarns.
In addition, the company is also investing towards modernizing-cum-balancing with a view to reducing the cost and increasing the production of value-added yarns.
The company’s total yarn spinning capacity stands at 2,92,840 spindles, of which 96,720 spindles are utilized to make cotton mélange and cotton blended dyed yarn. The capacity expansion will enable the company to further strengthen its position as a leading player in this niche segment.
In addition, the company has invested Rs. 25 crores in September last out of Rs. 80 crores earmarked for FY 2015 towards technology upgradation, debottlenecking, etc., which will lead to higher efficiency and cost reduction.
STIL is expanding operations in the home textiles division, Damanganga Home Textiles, Daheli, Bhilad, Gujarat. Post completion, the capacities in its existing facility will increase to 9.6 million metres per annum from 2.5 million metres at present. The project costing Rs. 88.50 crores is expected to be completed in 2016.
Further, the company has issued additional commercial paper (CP) of Rs. 35 crores. Post this offering, the company has issued CP aggregating Rs. 60 crores.
The CP issue has been rated CARE A1+ by Credit Analysis & Research Ltd. (CARE). Instruments with the aforesaid rating are considered to have strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.