Sutlej Textiles and Industries Ltd. (STIL), a leading manufacturer of value-added dyed yarns and home textiles, has reported revenue of Rs. 463.31 crores and profit of Rs. 29.78 crores for the first quarter of 2015-16.
Mr. C.S. Nopany, Executive Chairman, Sutlej Textiles and Industries Ltd., said: “Our performance during the quarter is reflective of the challenging business environment currently prevailing in the sector. Multiple headwinds led to a lag in the revenue momentum. However, improved contribution from higher margin products resulted in sustaining operating profitability. The newer capacities for producing value-added Cotton Mélange and Cotton Blended Dyed Yarn added last year have started functioning at optimal levels. I would also like to share that work on expanding our capacities at the Bhawani Mandi facility has commenced and acquisition of Birla Textile Mills (BTM) is progressing as per schedule. While the environment remains challenging at present, we are hopeful that our efforts towards strengthening operations should help us deliver consistent performance going forward.”
Key developments
Sutlej has achieved higher output of high margin Value Added Cotton Mélange and Cotton Blended Dyed Yarn. The company has successfully achieved higher utilization level from recently added capacities of 31,104 spindles of Value Added Cotton Mélange and Cotton Blended Dyed Yarn from unit – Chenab Textile Mills, Kathua (J&K) w.e.f. 1st November 2014. This higher output of value added products will strengthen the Company’s margins and profitability going forward
Sutlej has signed an agreement with Chambal Fertilisers and Chemicals Ltd., for purchase of Birla Textile Mills as a going concern, on slump sale basis. The transaction, approved by the Competition Commission of India (CCI), is expected to be concluded by September 30 on receipt of statutory and approvals. BTM, with a capacity of 83,376 spindles, manufactures cotton, synthetic & blended yarn in grey & dyed form. Post acquisition of BTM, Sutlej’s total spinning capacities will be 3,77,112 spindles.
Sutlej has commenced work on a brown field project installing 35,280 spindles at its Bhawani Mandi facility at a project cost of Rs. 270 crores. The project will be funded by a mix of internal accruals and debt. The dedicated capacity is focused on producing value-added cotton mélange and cotton blended dyed yarn.
Home Textiles Division expansion on track
STIL is expanding operations in the Home Textiles Division at one of the company’s units, viz., Damanganga Home Textiles. On completion, the annual capacity will increase to 9.6 million metres from 2.5 million metres. Costing Rs. 88.5 crores and the project is to be completed in phases, with the first phase of 16 looms installed and commissioned in July.
The company invested around Rs. 17 crores in the first quarter of FY16 towards technology upgradation, debottlenecking, etc. This will result in further improvement in efficiencies and plant utilization. The company plans to invest an additional Rs. 79 crores for the purpose during the year.
An ISO 9001: 2008 certified company, STIL is one of India’s largest spun-dyed yarn manufacturers. Under the leadership of Mr. C.S. Nopany, Chairman, the company has focused on value-added yarns such as cotton mélange yarn, Modal yarn, Tencil yarn, Bamboo yarn, Linen blended yarn, etc. With a significant presence across the value chain, the company has over the years, has also successfully carved out a niche for itself in the dyed yarn segment.
STIL exports its products to over 60 countries. It has presence across major developed and emerging economies like Australia, Argentina, Bangladesh, Bahrain, Belgium, Brazil, Canada, China, Chile, Cuba, Egypt, France, Germany, etc.
The company has also received a number of prestigious awards like the Niryat Shree – Gold Trophy Award for its export performance in spun yarn, the Gold Trophy from SRTEPC for best performance in export of fabrics to focused Latin American countries, and the Silver Trophy from SRTEPC for the second best export performance in the spun yarn category.