Arvind Mills Q4 net profit dips 59.49%

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Arvind Mills reported 59.49% per cent dip in net profit to Rs 21 crore for the quarter ended March 2006 compared with Rs 53 crore in corresponding quarter of the previous year. Sales were 19 per cent down to Rs 358 crore compared with Rs 439 crore in the year-ago period.

For the full year ended March 2006, the company posted flat net profit at Rs 127 crore for the finanical year ended March 2006. Sales dropped to Rs 1,592 crore from Rs 1,655 crore last year. However, profit before tax rose 6 per cent to Rs 136 crore compared with Rs 129 crore.

The company has declared a dividend of 10 per cent for the year, the same as last year.

Arvind Mills proposes to increase its jeans manufacturing capacity at Banglore to 9 million pieces per annum. The company also proposes to start a new trousers facility in Ahmedabad with 1.5 million annual capacity and will add a capacity of 1 million per annum to its existing knits garment operations.

It has decided to merge Arvind Brands and Arvind Fashions, 100 per cent subsidaries, with itself. The company had acquired 53.4 per cent equity holding of ICICI Ventrue Fund's Management in Arvind Brands for Rs 106 crore making it a wholly-owned arm.

Total outlay for the expansion is likely to be to the tune of Rs 50 crore and when the facilities become fully operational it is likely to contribute Rs 200 crore to the topline of the company.

According to Jayesh Shah, CFO and director, "The company will continue to focus on its strategy of de-risking the cyclical business by verticalisation and renewed focus on the domestic market. The merger would allow the growth potential of the brands business to be captured in the parent company financials."