Our priority in last one year was to stabilise operations: M Shivkumar

Q&A with CFO, Raymond

Raymond, a textile major in the second quarter of FY14 has reported a rise of 84% in it's net profit on the back of better margins in the textile and the apparel business.

M Shivkumar, CFO of Raymond in conversation with Sharleen D'Souza de-constructs the company's Q2 results. Edited excerpts"

How has Raymond managed to improve margins in the textile and apparel business?

In the textile segment, better product mix, higher realization, continued increase in the off-take of combo packs and makers, besides operational efficiencies has improved our textile performance.

In the apparel business ,our priority in the last one year was to stabilise the operations and build a robust platform for growth, which included supply chain consolidation, disposal of old inventories, closure of Colour Plus factory, continuous evaluation of non-performance stores etc.. We have been able to undertake these activities successfully and now are poised for better times ahead.

Do you think you can continue this performance in the coming quarters as well?

We are cautiously optimistic going forward and subject to macro-economic factors are not affecting us adversely.

Will you be able to sustain the margins going ahead?

We expect to sustain our margin levels going forward on a year on year basis.

How has the rupee depreciation helped the company in this quarter and to what an extent has it helped?

We are a net earner of foreign currency which is to the tune of $90 to $ 100 million. Hence any dollar appreciation benefits us but also comes with a rising input cost.

What are the changes in the working capital management that the company has made?

We constantly review our working capital levels from time to time including monitoring fluctuations arising from build-up of inventories for the season and take appropriate action as is necessary to balance the needs of the business.