Indo Rama Synthetics reports Q1 net profit of Rs 22.05 crore

Polyster manufacturer Indo Rama Synthetics India Ltd has reported a net profit of Rs 22.05 crore for the first quarter of current fiscal, against a net loss of Rs 30.03 crore in the year-ago period.

The company's net sales during the quarter ended June 30 stood at Rs 705.27 crore as against Rs 706.26 crore in the first quarter of the previous fiscal 2012-13, it said in a press release.

Indo Rama Synthetics, India's largest dedicated polyester manufacturer, also said it has taken some cost improvement initiatives, which will further add to its competitiveness.

"With the polyester prices bottoming out and rupee stabilising, we expect the sentiments and performance to improve from here," the company said.

Commenting on its financial performance, the company's Chairman and Managing Director O P Lohia said, "The overall market outlook for polyester remained turbulent and uncertain in the last few quarters. High raw material cost has impacted the overall business proposition in a big manner.

"We remained watchful, agile and prudent and have launched several operational excellence initiatives to further enhance our operational performance in the last quarter. I am confident that with our clear strategic focus, superior execution and top notch team, we will be delivering better margins in the future."

Lohia added that the "recent government announcement of levying Provisional Anti Dumping Duty on imports of PTA (purified terephthalic acid which is used in making poylster) will have a huge impact on the margins of the polyester industry, which is already reeling under thin margins and will keep on suffering as competition will become more severe.

"The downstream industry will have to become more alert as there is no anti dumping duty on fabrics which would become expensive and the garment would also become dearer."

The company has an integrated manufacturing complex in Butibori near Nagpur in Maharashtra, with production capacity of 6,10,050 tonnes per annum of various products.

Indo Rama said it expects to see improvement in the overall economic environment to help it perform better in the coming quarters.

"With demand looking up in the coming year, we project that the following quarters will be better than the last," it said.