RSWM reports 38.8% YoY growth in sales at Rs1,001cr in Q3FY22

8 Feb 2022 , 05:31 PM

RSWM Ltd., one of the largest manufacturers and exporters of synthetic and blended spun yarns from India, announced its quarterly results and reported substantial growth in the quarter. However, its stock settled lower at Rs 490 despite the company’s strong financial numbers, down by Rs 31.15 or 5.98% against its previous closing price of Rs521.15.

Company’s consolidated sales for December 2021 quarter stood at Rs 1001 crore as against Rs 721 crore for December 2020 quarter, up by 38.8% YoY. Revenue for the 9M period ended December 2021 stood at Rs 2,696 crore against Rs 1,490 crore for the previous 9M period, increasing 80.9% YoY.

Its EBITDA for Q3 FY’22 was reported at Rs 121.50 crore against Rs 99.50 crore for Q3 FY’21, increasing 22.10% YoY. EBITDA for the 9M period ending December 2021 was Rs 322 crore against Rs 80.10 crore for the 9M period ending December 2020, up by 301.90% YoY.

Its PAT for the quarter ended December 2021 stood at Rs 50.40 crore against the loss of Rs 31.70 crore for the quarter ended December 2020, a growth of 58.90% YoY. PAT for the 9M period ending December 2021 stood at Rs 130 crore against a loss of Rs 51.40 crore for the previous 9M period.

EBITDA margin for the quarter ended December 2021 settled at 11.90% as against 5.4% for the previous corresponding quarter, with an EBITDA margin of 11.9% for the 9M period ended December 2021. PAT margin for the quarter ended December 2021 stood at 5% and PAT margin for December 2020 quarter stood at 4.4%.

Business Outlook

·         Post Covid, resumption of offices, shopping complexes and increase in gatherings has led to strong resurgence of demand in Q3FY22

·         Consumer sentiment is upbeat due to large scale vaccination drive and waning fear of third wave.

·         Unrestricted festive gatherings and wedding seasons expected to drive the demand in H2 also.

·         Uniform season expected to drive entire value chain in Q4FY22

·         Business witnessed an uplift month-on-month basis in last 9 months.

·         Our domestic turnover has increased of 25% Y-o-Y as compared to Q3FY21.

·         Our export turnover has increased of 71% Y-o-Y as compared to Q3FY21.

·         For 9 months our turnover has increased by 81% in 9MFY22 as compared to 9MFY21.

·         The Q3FY22 has been ended with total revenues at INR 1,007 Cr. and PAT of INR 50 Cr.

·         The 9MFY22 has been ended with total revenues at INR 2,716 Cr. and PAT of INR 130 Cr as compared to INR 1,508 Cr. And PAT of INR (51) Cr. in same qaurter last year

·         Strong demand and continuous rationalisation of costs has led to a strong bottom-line growth

·         Increased profitability,controlled fixed expenses and sufficient cash  generation has put the company in very comfortable position in terms of liquidity.

·         Sufficient cash generation has put the Company in very comfortable position in terms of liquidity.

·         The Company is exploring the long term growth opportunities through orginic growth

·         Company is investing around INR 330 Cr. in expansion of Denim Fabric manufacturing capacity, Cotton Melange Yarn manufacturing capacity and Modernisation & Balancing equipments across all units.

·         Company entered into Knit Fabric business at Mordi with initial investment of INR 80 Cr. in first phase and the same is progessing well

·         Investment in Denim, Cotton Yarns and Knit fabrics expected to increase our top line by around INR 575 Cr.

“Commenting on the results, Mr. Riju Jhunjhunwala, Chairman & Managing Director of RSWM Ltd. said,we are pleased with our operating performance for Q3FY22 driven by strong performance in both segment and better realization. We are confident of continuing with the growth momentum for rest of the year and we remain focussed on improving all the key metrics at all levels across our manufacturing facilities and enhance market share. Our consolidation efforts towards new investment allocation and focus on core business capabilities building remains critical for sustainable business growth. We are confident that the company would continue to build on the momentum while executing our blueprint with disciplined determination.”