Super House's turnover up by Rs 90 cr

Kanpur-based leather major Super House Ltd's turnover has jumped to Rs 324.6 crore, with an increase of over Rs 90 crore from the previous year, crossing the Rs 300-crore mark for the first time.

The firm is looking forward to increasing its turnover to Rs 400 crore at the end of this fiscal as it has already reached a turnover of Rs 134 crore up to August-end.

But the company increased the dividend by another 5 per cent, making it a total of 15 per cent for the fiscal, due to heavy commitments for capital expenditure. But the company's profit before tax has remained small at Rs 16.98 as against Rs 12.70 crore in the last fiscal.

AK Agarwal, director of Super House, told shareholders that the imposition of anti-dumping duty on leather footwear from China and Vietnam, by the European Union and their turning towards India to source their requirements has led to massive gains for Indian leather industry. There is no decent unit in the country who has not gained from this turn of events, Agarwal said.

The company has chalked out a policy for increase in its capacity which is slated to go up to 2.3 million pairs of shoes from the current 1.8 million. It is undertaking a capital expenditure of Rs 50 crore.

Also, the tannery capacity is being increased from 2 million sq ft a day to 3 million sq ft a day. It has changed its product line and has started a factory for ladies footwear in Agra.

Besides these, the company is diversifying into comfort shoes, costing about $50-60 a pair and catering to the middle-class Americans.

It has started penetrating the US market where one of its latest customer is GAP. Its Noida unit , one of its twelve units, has already been approved by the American buyers Association.The company is confident of getting recognition for its Unnao unit very soon. However the company's products are sold in the buyers brand name , rather then its own brand Allen Cooper .

Its retail outfit is gradually increasing and its indigenous sales had reached Rs.27.01 cr in the fiwcal 07-08 as against Rs.15.53 cr registered in the previous fiscal 05-06.

A major obstacle in the path of company's progress is the rupee appreciation.It was explained at the AGM that the profits margins in leather industry is that of 5% and the rupee appreciation is of 14%.

How does these will ensure profits? In fact the only obstacle to the company crossing Rs.400 cr turnover in this fiscal could be the rupee appreciation. In fact the company has rejected many orders which did not took into account the appreciation and the company is not prepared to sell at a loss. EOM.