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Indian fabric makers rake in revenue growth in June quarter

A report by the Centre for Monitoring Indian Economy (CMIE) says, cloth industry in India has seen healthy growth in revenues during the June 2015 quarter. Aggregate net sales of the 54 companies that reported their interim results grew by eight per cent year-on-year during the period. The growth in sales was broad-based with 36 companies registering higher sales.

During the quarter under review, revenues of Indo Count Industries and Mafatlal Industries surged by 45.9 per cent and 59.3 per cent, respectively. Indo Count Industries’ increase in revenues was attributed to a robust growth in home textiles. Sales of home textiles grew 80 per cent solely driven by a rise in volumes. However, the company’s yarn segment revenues fell by 10 per cent due to decline in realisations.

Net sales of other companies such as Bombay Rayon Fashions, Mandhana Industries, Jindal Worldwide, Aarvee Denim & Exports and K G Denim grew in the range of 10-25 per cent. Revenues of Richa Industries and Sunil Industries grew more than two-fold. However, revenues of Arvind increased by a mere 2.6 per cent during the quarter. The company’s denim and woven fabric segments, which together account for more than 75 per cent of the total revenues, reported a feeble sales performance. Woven fabric segment revenues grew by a mere 0.6 per cent, while denim fabric segment revenues fell by 1.4 per cent. Nonetheless, a 34 per cent increase in garment sales and 17.5 per cent rise in knitted fabric sales boosted the overall revenues of the company.

Operating profit of the industry increased by a robust 36.8 per cent in the quarter and operating margin increased by 280 basis points to 13.2 per cent. Indo Count Industries’ net profit grew more than two-fold and of Jindal Worldwide, Nandan Denim and Mafatlal Industries surged by 28.7 per cent, 40.7 per cent and 68.2 per cent, respectively. Bombay Rayon Fashions posted a profit worth 1.5 per cent of its total income as compared to a loss equivalent to 4.8 per cent in the year-ago quarter.