Last year's volatile cotton prices and sluggish overseas market led to a 83 per cent dip in Ahmedabad-based home textiles player Pradip Overseas Ltd.'s net profit for the quarter ended June 30, 2012. As against Rs 11.94 crore in the corresponding quarter last year, the company posted a net profit of Rs 2.04 crore this year.
Similarly, Pradip Overseas' revenue for the first quarter of fiscal 2012-13 stood at Rs 279.49, registering an over 50 per cent dip from Rs 572.52 crore in the corresponding quarter last year.
"The cotton and grey cloth prices had risen substantially and then dipped suddenly, leaving us with high cost inventory which the company was unable to pass on to customers. Also, from the home textiles point of view, Pradip Overseas' major markets viz. US and Europe also showed a steep decline in demands," said Kaushik Kapadia, company secretary at Pradip Overseas Ltd.
It needs to be mentioned that with export commitments having dwindled in recent times, the company has also shelved its denim foray plans and would instead focus on expanding its core business of home textiles.
Moreover, from a current capacity of 140 million metres per annum, most of which are in home textiles, the company is adding about 40-50 million per annum. Pradip Overseas is also putting up new capacity for apparels. Of the 40-50 million metres being added this year, about 14 million metres of capacity will be used for manufacturing apparels. In all, the company is investing about Rs 400 crore for its expansion activities.
Sometime back, the home textiles major had launched its own brand of home furnishing titled 'MYCK' which the company markets through distributors to enterprise customer. Once introduced, the value added products will help Pradip Overseas set up company owned stores in near future.