TT Ltd's Rs 265 cr expansion plan

Backed by robust growth in last fiscal, textile firm TT Ltd plans to invest about Rs 265 crore in the next two-three years to set up spinning and ginning mills.

"We have initiated a Rs 116 crore expansion project to increase the production capacities and to reduce power costs," the Company's Joint Managing Director Sanjay Jain said.

"The company is also considering another expansion plan of Rs 125-150 crore for setting up more spinning mills," he said.

The company is setting up two spinning mills at Gajroula in Uttar Pradesh and Gujarat with a capacity of 18,000 and 25,000 spindles respectively. While the UP mill would start production from July this year, the Gujarat factory would become operational in March 2007.

"The total capacity after the expansion from the four spinning mills will be 80,000 spindles," he said.

To fund the ongoing expansion plan, the company has tied up loans of Rs 90 crore," he said, adding that for the remaining the company would bring rights issue in two-three months and any deficiency would be met through internal accruals.

The company, which already has facilities in Uttar Pradesh and Tamil Nadu, has already filed the document with Sebi on May 29 for the approval of its rights issue.

Giving details of the second expansion plan, he said, "The project details are still being worked out. It would be Rs 125-150 crore expansion, which will start in 2007-08 after the current expansion. It would add more spinning and ginning mills for producing raw cottons for export purpose."

TT Ltd's net profit in 2005-06 stood at Rs 5.08 crore compared to Rs 2.51 crore in the previous fiscal. Turnover more than doubled at Rs 333 crore in the last fiscal against Rs 163 crore in 2004-05.

Of the total turnover, Rs 200 crore is from export to 20 countries as against Rs 85 crore in 2004-05.

"The company is aiming a turnover of Rs 400-500 crore this fiscal," Jain said, adding that out of this 60-65 per cent would constitute exports.