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RSWM reports net profit of Rs44.75cr in Q2; Company looks forward to continued robust business performance in Q3FY22

The company continued to see the rallying effect of the positive sentiments and market recovery on the business in FY22, reflecting in the strong sales and profit results recorded in the first half of the year, despite the continued lockdown in the initial months of H1 FY22.

November 09, 2021 3:57 IST | India Infoline News Service
Result Analysis
RSWM Ltd., RSWM is one of the largest manufacturers and exporters of synthetic and blended spun yarns from India, announced its financial results for the quarter ended September 30, 2021.

The Net profit of the company reported to Rs44.75cr in the quarter ended September 2021 as against net loss of Rs15cr during the previous quarter ended September 2020.

RSWM Limited delivered a robust business performance and closed H1FY22 with INR 82 crores Profit After Tax (PAT)- a strong return to profitability after the loss of INR (83) crores the corresponding period in H1FY21. The company continued to see the rallying effect of the positive sentiments and market recovery on the business in FY22, reflecting in the strong sales and profit results recorded in the first half of the year, despite the continued lockdown in the initial months of H1FY22.

The stock ended at Rs466 down by Rs6.05 or 1.28% from its previous closing of Rs472.05 on the BSE.

Despite the lockdown induced restrictions in many parts of the country during the second wave of COVID19, RSWM Ltd. registered a turnover of INR 1695 crores in H1FY22 against INR 769 crores in the corresponding period in FY21. Within the group, RSWM Yarn business witnessed a sudden surge in demand in H2FY21. With ease in restrictions, the denim business performed better with increasing demand from existing customers which continues to see upwards growth trend and reflects in the strong business performance of the group.

RSWM also announced its business plans, including a few critical structural changes, manufacturing capacity building and allocation of INR 330 crore to continue growth trajectory and stronger financial performance. The investment allocation will support expansion of Denim Fabric manufacturing capacity, Cotton Melange Yarn manufacturing capacity and Modernisation & Balancing equipments across all units.

Current Scenario and Outlook

RSWM is looking forward to continued robust business performance in Q3FY22. Despite the initial impact of local lockdowns and night curfews which impacted dispatches in the first quarter of FY22, consumer sentiments and market confidence improved due to increasing vaccination. Along with this, operations at the manufacturing plants remained normal. Moreover, increased penetration of organised retail, festive celebrations, favourable demographics and rising income level is expected to drive demand of Textiles after recording sharp increase in in Online apparel buying during COVID 19 lockdowns. With this, pandemic has also led to increased demand for Technical Textiles.

Additionally, the company will be setting up 30,000 spindles of Mélange yarn at its largest unit in Kharigram (Rajasthan) and also installating 20,000 spindles for combed cotton at the yarn facility in Mordi (Banswara). This is apart from the modernization and balancing equipment across all the locations in FY22.

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