Apparel Online India Magazine May 1-15, 2019 | Page 25

TEX-FILE
income numbers in Q3 of FY ’19.
The consolidated revenue of the
continuing business for Q3 of FY ’19
decreased by one per cent year-on-
year from Rs. 1,691 crore in Q3 of
FY ’18 to Rs. 1,680 crore in Q3 of FY
’19. The management attributed this
decline to lower volume sales by 5
million metres in the denim business.
Many international customers have
undertaken inventory corrections
due to which the sales fell, it
informed. This caused an overall
revenue reduction of 7 per cent,
which was offset by an increase of 32
per cent in revenue from advanced
material business. For Q2, the overall
revenue growth of 12 per cent came
on the back of 15 per cent growth in
garments revenue and 21 per cent
in the advanced materials’ division’s
revenue, whereas it reported 13.3
per cent increase in consolidated net
profit to Rs. 64.3 crore for the first
quarter ended June 30, 2018-19.
It is to be noted that Arvind has an
annual production capacity of nearly
250 million metres of fabric -- both
denim and woven fabric -- but the
company converts only 10 per cent
into garments. Over the next three
years, it aims to ramp this up to 40
per cent, and then to 50 per cent by
2022. Also in future, more and more
of its looms and mills will be used for
contract manufacturing of garments
for its clothing partners.
Vardhman Textiles
banking strongly on new
developments in fabric
Vardhman Textiles’ revenue grew
by 12.3 per cent year-on-year and
8.2 per cent quarter-on-quarter to
Rs. 1,648 crore. Its revenue came
above estimates of Rs. 1,537 crore.
On the other hand, it reported good
numbers mainly on account of better
operational performance. Its revenue
in Q2 of FY ’19 grew by 27.7 per
cent year-on-year and 10.3 per cent
year-on-year to Rs. 118 crore and
Rs. 1,592 crore from the acrylic fibre
and textiles segments respectively.
Similarly, its revenue in Q1 of FY
’19 from acrylic fibre and textiles
segments grew by 47.2 per cent year-
on-year and 6.9 per cent year-on-year
to Rs. 99 crore and Rs. 1,625 crore
respectively.
The company has lined up Rs. 1,500
crore capex for the next 2-3 years,
which it will use equally for fabric
and yarn manufacturing facilities.
Additionally, yarn production from
increased capacity will be wholly
used by fabric division. It also
expects that fabric division would
be more profitable compared to
yarn division owing to less capital
requirement.
Grasim Industries
greater market
acceptance of viscose is a
winning edge
Grasim Industries’ viscose staple
fibre (VSF) business in Q3 of FY ’19
stood at Rs. 2,616.7 crore and at Rs.
2,187.5 crore in the corresponding
quarter. “The VSF business delivered
highest-ever production in Q3 of FY
’19 at 1,41,000 tonnes, an increase of
11 per cent, and the sales volume at
1,34,000 tonnes,” the company said.
The net revenue for Q2 of FY ’19 at
Rs. 2,606 crore was up by 23 per cent.
The VSF business reported quarterly
production and sales volume of 137
KT and 136 KT respectively. The
share of domestic sales in the overall
sales rose to 84 per cent in Q2 of
FY ’19 from 70 per cent in Q2 of FY
’18, led by a huge demand. The net
revenue for Q1 of FY ’19 at Rs. 2,480
crore was higher by 35 per cent.
The company recently launched its
eco-enhanced VSF variant ‘Livaeco’
on the back of the tremendous
success of its brand Liva. The VSF
business will continue to focus on
expanding the market in India by
partnering with the textile value
chain, achieving better customer
connect through its brands Liva and
Livaeco and enriching the product
mix through a larger share of
specialty fibres. Last month, it signed
a deal to acquire 100 per cent equity
shareholding of Soktas India from
its current promoters, for Rs. 165
crore. Thomas Varghese, Business
Head – Textiles, Aditya Birla
Group, said, “The acquisition is in
line with Grasim’s linen business
strategy to strengthen its presence
in the premium fabric market.
Increasing disposable income,
fashion and quality orientation
of Indian consumers has resulted
in an increase in the demand for
premium fabric over the years. This
acquisition is a compelling strategic
fit and further strengthens our
leadership in the premium cotton and
linen fabric market in India.”
ESSENTIALS
The companies
are optimistic
and believe
that increased
penetration of
organised retail,
favourable
demographics
and rising income
levels are likely to
drive demand for
textiles this year.
Morarjee Textiles
consolidating for
greater integration of
supply chain
Ashok Piramal Group’s Morarjee
Textiles is a global player in the
premium shirting fabric and high-
fashion printed fabric business.
The net profits of the last three
quarters of FY ’19 show the textile
manufacturer in the red, although
the net sales for Q3 was up. The
company reported Q3 net loss at Rs.
5.8 crore in December 2018, down by
2157.1 per cent from Rs. 0.3 crore in
previous year. However, its net sales
was at Rs. 95.3 crore in Q3, up by 0.08
per cent from Rs. 95.2 crore in the
corresponding period. Similarly, its
Q2 net loss was at Rs. 7 crore, down
by 2002.7 per cent from Rs. 0.4 crore
in September 2017 and net sales in Q2
was Rs. 82.4 crore, down by 4.5 per
cent from Rs. 86.3 crore in September
2017. With the profit margins
declining quarter-on-quarter, it
seems the company is facing a strong
competition from its peer group.
However, the company hasn’t
done any major expansion last
fiscal except in May when it
announced to undertake a backward
integration project to incorporate
its manufacturing processes and to
reduce the dependence on vendors
of yarn and weaved fabric. The
expansion project was intended
to replace the outsourcing of raw
materials (yarn and fabric) and
enable it to achieve higher levels
of integration of spinning, weaving
and printing activities and thereby
improve the margins.
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