Sutlej Textiles slumps after weak Q1 results

Sutlej Textiles and Industries tumbled 7.71% to Rs 899.95 at 10:01 IST on BSE after net profit fell 47.7% to Rs 23.58 crore on 18% growth in net sales to Rs 651.99 crore in Q1 June 2017 over Q1 June 2016.

The result was announced after market hours yesterday, 19 July 2017.

Meanwhile, the S&P BSE Sensex was up 33.36 points or 0.1% at 31,988.71. The S&P BSE Small-Cap index rose 67.28 points or 0.42% at 16,041.85.

On the BSE, 10,000 shares were traded on the counter so far as against the average daily volumes of 1,513 shares in the past one quarter. The stock had hit a high of Rs 930 and a low of Rs 897.05 so far during the day. The stock had hit a record high of Rs 988 on 19 July 2017 and a 52-week low of Rs 631 on 21 July 2016.

The stock had outperformed the market over the past one month till 19 July 2017, advancing 2.9% compared with the Sensex's 2.06% rise. The stock had, however, underperformed the market over the past one quarter, gaining 7.18% as against the Sensex's 8.93% rise. The scrip had outperformed the market over the past one year, surging 43.62% as against the Sensex's 15% rise.

The small-cap company has equity capital of Rs 16.38 crore. Face value per share is Rs 10.

Commenting on the company's Q1 results, C.S. Nopany, Chairman, Sutlej Textiles and Industries said that the domestic environment pressures continued to adversely impact the textiles sector during Q1 June 2017. Following the disruption due to demonetization, the imminent introduction of GST further dampened demand during this quarter. The implementation of GST has disrupted the unorganized sector which has been demanding its removal on fabrics and resolution of the inverted duty structure. As anticipated, margins during Q2 September 2017 continue to be under pressure due to the lack of domestic demand coupled with a strong rupee affecting exports, Nopany said.

He further said that Sutlej has been able to achieve top line growth as new capacities have started commercial production, both in spinning and home textiles. The operations are expected to be stabilized during Q2 September 2017 and the value added products will be the profit driver in the future, Nopany added.

Sutlej Textiles and Industries is an integrated textile manufacturing company.

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