INDIA: Indian Rayon and Industries Limited reports first quarter results

MUMBAI: Indian Rayon, a major Aditya Birla Group Company, has reported a turnover of Rs. 485.08 Crores for the quarter ended 30th June 2005, a growth of 16.6% vis-à-vis Rs. 416.12 Crores achieved in the corresponding quarter of the previous year. While all businesses registered a good growth, Garments and Insulators have been the major contributors.

Madura Garments

The Garments division’s performance has improved substantially. Its revenue has soared by 19.5% to Rs. 127.95 Crores vis-à-vis Rs. 107.08 Crores recorded in the corresponding quarter of the previous year. Operating profit is up by 14.3% despite higher retailing cost and development cost for new contract export customers. Louis Philippe, Van Huesen and Allen Solly – its fashion brands have been the propellants while Peter England continued to maintain its momentum.

The opening of 16 new stores has bolstered its already strong retail presence. The division is aggressively expanding its controlled retail space for the future, both in malls and in High streets coupled with selected stores to provide an international standard retail experience.

Madura Garments will continue to be an industry leader. Its thrust will also be on Contract Exports with a focus on end-to-end of the value chain – from manufacturing to marketing. Consistent brand building efforts, development of innovative merchandise and aggressive campaigns for each of the brands, have hitherto accelerated brand growth and equity with consumers. The Division will continue to leverage upon these strengths.

Rayon Division

The Rayon Division’s revenues at Rs. 86.81 Crores rose 15.3% compared to Rs. 75.31 Crores in the corresponding quarter of the previous year. While VFY sales volume grew by 12.7% to 3,926 tonnes, realisations were affected due to high inventory levels and cheap imports from China. On a positive note, the chlor-alkali segment has been buoyant, buffeted by chemical volumes and higher ECU realizations leading to improved revenues.

Its new Caustic Soda plant of 45 TPD was commissioned in July-05, taking its total capacity to 160 TPD. This will be further extended by 40 TPD. A captive power plant of 20 MW is on the anvil too.

Textiles Division

The Textiles Division’s revenues have gone up 7.7% to Rs. 110.35 Crores as against Rs. 102.49 Crores in the corresponding quarter of the previous year. Profits jumped by 102.6%. This strong performance is boosted by the Linen fabric segment, benefiting from the growing awareness and usage. Worsted segment has gained from increased operations of expanded wool combing facility. Synthetic yarn benefited from the conversion into EOU.

The Expansion of its Wool combing facility by 4,000 TPA became fully operational during the quarter.

Going Forward

  • Madura Garment will focus on retail expansion, optimising cost and brand transformation ongoingly
  • VFY’s thrust on improving quality will continue. It is expected to benefit from the buoyant chlor-alkali segment through utilising the recently expanded caustic soda capacity
  • Textiles will gain from its focus on niche areas and a positive textile environment post WTO

Overall, the outlook for the Company is optimistic given the strategic thrust, growth and the capex initiatives taken in each of the businesses.

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Added: August 26, 2005
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