Indo Rama Synthetics Q3 loss widens 5-fold to Rs 38 cr

Its net revenue during the quarter was Rs 624 cr, down 6% from Rs 663 cr a year ago

Hit by demonetisation and rising oil prices, Indo Rama Synthetics (India) Ltd on Wednesday reported a widening of net loss to Rs 37.95 crore in the third quarter ended December 31, 2016.

The company had posted a net loss of Rs 7.76 crore in the corresponding quarter of last year, Indo Rama Synthetics said in a BSE filing.

Its net revenue during the quarter under review stood at Rs 623.92 crore as against Rs 663.25 crore in the year-ago period, down 5.92 per cent, it added.

Indo Rama Synthetics (India) Ltd CMD O P Lohia said: "Industry has witnessed increase in oil prices in the last three months and consequent increase in raw material prices i.E. PTA and MEG, but because of demonetisation impact the increase in price of raw material could not be passed to customers in same line..."

Also, there was a sizeable drop in volume terms immediately after demonetisation leading to negative financial impact which is now slowly getting back to normal, he added.

Lohia further said as of now with some improvement in financial markets and also increase in cotton prices the cost is being passed on.

"There has been dumping of polyester fibre from China and other countries for more than one year, which has been putting pressure on prices and impacted the margin," he added.

Expressing optimism over the expected implementation of GST, he said it is expected to be a growth stimulator for the polyester industry.

"Looking forward, global and domestic demand for polyester fibre is looking upward and so are the prices. This will open new opportunities for man-made fibre producers," he said.

Shares of Indo Rama Synthetics were trading 5.02 per cent down at Rs 35 apiece on BSE.