Srf Net Profit Declines By 25 Per Cent To Rs 16.31 Cr

SRF Ltd, a leading player in industrial yarns, fabrics and fluorochemicals, has ended the financial year 1996-97 with a 25 per cent slide in net profit to Rs 16.31 crore.

During April 1996 to March 1997, the company's net sales have risen by 15 per cent to Rs 557.55 crore, from Rs 484.45 crore in the corresponding period last year.

Its profit before interest, depreciation and taxes (PBIDT) have touched Rs 180 crore in 1996-97, registering a rise of 23 per cent over the corresponding period last year.

The board of directors of SRF Ltd approved the company's unaudited financial results for the year ended March 31, 1997 last Saturday.

 

The nylon tyre cord/ industrial yarns/ fabrics and refrigerant gases businesses of the company have notched up sales growth of 15 per cent and 14 per cent respectively, while operating profits of these units have grown by almost 21 per cent and 34 per cent respectively.

Arun Bharat Ram, vice-chairman and senior managing director, SRF Ltd, said:" The company has tried to consolidate and focus on core business areas of industrial yarns/fabrics and fluorochemicals."

SRF is also working on a financial recast plan which entails infusion of fresh equity by way of a rights issue and induction of funds from the sale of SRF Finance.

Refixation of repayment terms of debts have already been achieved, according to a company release.

The new measures announced by the company would reduce the debt-equity ratio, increase the tenure of debt and consequently reduce the interest burden.

Post-rights issue and private placement, the equity share capital of the company will go up from Rs 39 crore to nearly Rs 60 crore, taking the debt equity ratio to 0.6:1.

The rights issue and private placement of equity shares are expected to bring in funds worth Rs 100 crore.

Together with the GE Capital deal, this will generate funds worth nearly Rs 150 crore, which will be utilised to retire a part of the Rs 600-crore debt burden that the company faces.

During the year, the SRF group's Madras and Gwalior units achieved full capacity utilisation for nylon yarn production.

A 100-per cent growth in coated fabrics exports is planned for the current year, while engineering plastics volume, which grew 25 per cent in 1996-97, is estimated to grow by over 30 per cent in 1997-98.