Today's Top Gainer
Note:Top Gainer - Nifty 50 More
Mr. Sanjay K Jain, Joint Managing Director, TT Ltd. He is an MBA-Gold Medalist from IIM Ahmedabad, and an Associate Member of the Institute of Company Secretaries of India (ACS) and institute of Cost Accountant of India (AICWA). He has an experience of over 16 years in the textile industry and is looking after marketing and finance. He has been instrumental in setting up a marketing network for raw cotton yarn in over 20 countries.
TT Textiles Ltd. was incorporated in 1950. TT Textiles now completes the total forward integration in the world of cotton and cotton textiles. We started from in-house cotton farms to yarns; then moved to textiles and finally into garment accessories. We have a complete range - from raw cotton to finished products. The Company has also made a foray in value added organic products. It has got certification from Control Union, Europe and is exporting organic yarn in a big way. Further, it has currently introduced range of organic innerwear for the first time in India. It also plans to diversify its knitwear markets to the Middle East and Africa. The Company is already exporting its fibre and yarn to over 35 countries spread across five continents.
Replying to Anurag More of IIFL, Sanjay K Jain says, "We are aiming to be a Rs10bn company with a strong presence in the domestic knitwear market via our TT brand within the next three years."
Brief us about your product portfolio? What is your market share?
We are a vertically integrated textile company; we have presence in raw cotton fiber, cotton yarn, knitted fabrics and knitted garments. The TT brand is a very old brand in innerwear and is our core business. But, we have also diversified into yarn, fabrics and fibers. Today we straddle the complete textile chain in cotton.
For different products we have different positioning. In innerwear, we are in the top ten brands in India; in yarn, we have 4% share in exports and we export 90% of our yarn production.
We have four spinning mills in India spread across North India, South India and in Gujarat.
Our yarn is exported to 35 countries across the world.
Innerwear, fabrics and knitted garments we sell locally in UP, Delhi, Central India, Bihar, MP, Haryana, Punjab and Rajasthan.
Which new trends you are witnessing?
Knitwear: Apart from a very strong 15-20% growth in domestic market, two important trends which are important. Firstly, the market is shifting from unorganised segment to branded organised segment. Secondly, the organised retail segment share is slowly growing. Our Company is well positioned to take advantage of both these opportunities.
If you look at cotton yarn business, India is clearly becoming a market leader because it is among the world’s largest cotton producers.
Pakistan’s crop has been destroyed by floods; China’s cotton crop is lower this year. India is expecting a growth of 15-20%.
The yarn business is expected to do very well because of our relative cost advantage vis-à-vis our competitors like Pakistan and China.
India is the largest exporter of yarn in the world. In yarn, we are No.1 and in cotton we are No.2 after USA. We are looking to tap the big opportunity in yarn.
What are the challenges and opportunities in textiles?
Opportunities are manifold, but the biggest and most important is the growing domestic consumption for knitwear products, especially in the semi-urban and rural areas where our brand has the strongest appeal.
The large and growing Indian cotton crop would provide the spinning industry a great opportunity to grow profitably as it would replace spinning in other parts of the world.
The biggest challenge is the rising wages and availability of skilled labour to produce and meet the growing market needs. Another big challenge is to manage the growing volatility in all markets and products.
Hence, we need to put in place a balanced and prudent hedging/risk management policy. The Company has already put in place a detailed risk management policy to take care of volatility. Further, it is working to balance its business and market segments by having a more balanced portfolio.
Brief us about your expansion plans?
We are planning to spend Rs1.5bn over the next two years to build new garment capacities in Tirupur and expand our yarn operations in Gujarat to 50,000 spindles. Apart from that we shall invest in wind energy for captive requirements and may also go for de-bottlenecking our existing facilities.
We started first by making knitted garments. Over the years, our focus shifted to yarn significantly. Since the past two years, we are again focusing on knitted garments, primarily for two reasons. One is the growing demand for innerwear. Secondly it is a very stable business and safe from any global shocks.
In recession, our business grew by 50%. Again this year, we expect the business to grow by 100%.
We want to become one of Top 5 players in innerwear and casual wear. We plan to do the same by leveraging our household and popular TT brand by going for both product and market diversification.
We have also introduced, for the first time in India, organic innerwear. Normally organic innerwear is sold more in the developed countries. This innerwear will be available at a premium of 25% compared to normal innerwear. Normally in Europe and the US, it sells at 2 to 3 times the price of normal products.
We are not charging a premium from customers. We have recently launched organic innerwear and will gradually promote it in the market.
We have also increased our product portfolio and introduced 51 new products. From being an innerwear company, we are becoming an innerwear and casual wear company. We are getting into T-shirts, Bermudas, etc.
We are expanding in the Hindi belt and have also appointed dealers in other parts of India like in Kerala, AP and Maharashtra.
We have also tied with all the leading stores like Pantaloon, Vishal Retail, More, Reliance Retail, Bharti Walmart, etc. to sell our products. We have also tied up with BSF, CRPF, Police and others and we have seen strong growth.
We are in wind power, which we use for our own consumption and plan to extend this further to use clean energy and sell whatever surplus we generate.
What is the outlook for FY11 and beyond?
We are looking to grow at 40% in both topline as well as bottomline this year and touch Rs5bn in FY11. Our knitted garments business is projected to grow by 100% while our other businesses would grow at 20-25%.
We are aiming to be a Rs10bn company with a strong presence in the domestic knitwear market via our TT brand within the next three years.
Tell us about your exports?
Last year we exported about Rs2bn out of our total turnover of Rs3.5bn. This year we are targeting Rs5bn of net sales, out of which exports would be about Rs2.75bn.
We are exporting to over 35 countries spread across 5 continents (excluding Australia).
Tell us about your revenue mix?
Currently 65% of our revenue comes from exports. It was earlier as high as 75%. In the next two years we plan to bring it down to 50%. This would help us exploit the phenomenal opportunities in the domestic market and ride the consumption boom in semi-urban and rural areas.