Indo Count eyes CDR exit

Indo Count is considering exiting the CDR mechanism by the third quarter of this financial year

With the textile sector seeing a recovery due to stable raw material prices and growth in exports, companies such as Indo Count are proposing an exit from the corporate debt restructuring (CDR) mechanism they had entered into a few years ago.

Indo Count, a bed linen and towel manufacturer, is considering exiting the CDR mechanism by the third quarter of this financial year and is in talks with bankers to decide the rights of recompense. Union Bank of India is the lead bank for the CDR monitoring.

The company has seen a turnaround in its finances. With the US market picking up, it has seen a rise in exports. In 2008, the company was hit as markets such as the US and Europe were facing a downturn and this led to an impact on consumer sentiment.

Bankers confirmed Indo Count was in talks with them to exit CDR. In July 2008, the company was admitted into the CDR cell; Rs 300 crore has been spent on restructuring the company’s debts.

For 2013-14, the company’s debt-to-equity ratio was 1.3, while its debt stood at Rs 396 crore. For 2012-13, its debt-to-equity ratio was 6.68. Indo Count’s revenue for 2013-14 stood at Rs 1,500 crore, a rise of 23 per cent compared to 2012-13, while net profit was Rs 110.39 crore, up 274 per cent. In the past year, the company raised product prices and this aided the rise in profits and sales.

The company is also considering expansion and plans to double its capacity in the next two-three years. Currently, its capacity stands at 50 million metres; it plans to increase this to 68 million metres by the third quarter of this financial year and to 112 million metres by the end of 2016. It plans to spend Rs 70 crore in capex and expand in Maharashtra, due to favourable textile policies in the state.

K K Lalpuria, executive director of Indo Count, said, “We hope to achieve higher sales, as the economic environment in the US has started to pick up, which will cause our sales to rise.”

About 75 per cent of the company’s sales are accounted for by the US and 25 per cent by Europe, West Asia, Russia and Japan. The company is planning to expand to Australia and South Africa. This financial year, it hopes to increase its revenue to Rs 1,900 crore and net profit to Rs 170 crore.