Suryalakshmi Cotton Mills Ltd, one of the major players in the textile industry in South has modern spinning units at Amanagallu in Mahboobnagar District in Andhra Pradesh and a 40 million meter denim plant at Ramtek near Nagpur, Maharashtra. The company’s subsidiary Suryakiran International Ltd, located in the outskirts of Hyderabad, is into the manufacture and export of denim garments. Suryalakshmi’s large transnational network backed by a strong marketing presence ensures quality products to its domestic and international clients.
Replying to Yash Ved of IIFL, Paritosh says, “The company is setting up of 25 MW coal-based captive power plant at a cost of Rs 1.24bn at Ramtek, Maharashtra.”
What is the outlook you see for the textile sector?
The outlook for weaving continues to be good and in the case of spinning sector unless some measures are taken by the government, it is difficult to manage promoting exports.
Brief us about your expansion plans?
The company is setting up of 25 MW coal-based captive power plant with a cost of Rs1.24bn at Ramtek, Nagpur district, Maharashtra and the same was financed by term loan of Rs 80 crore from banks, internal generation/promoters contribution of Rs 44.36 crore. Financial closure for this project has already been completed. The expected C.O.D for the thermal power project is April ‘12.
Further, the company has taken up expansion cum replacement under TUF scheme for increasing and replacing the looms with a cost of Rs 272.5mn at Ramtek, Nagpur district, Maharashtra and the same will be financed by Term Loan of Rs 180mn from bank, internal generation / promoter’s contribution of Rs 92.5mn. Financial closure for this scheme has already been completed. The expected C.O.D for this scheme will be Jan ‘12.
What are your fund raising plans?
We have already done the financial closure for both the diversification and expansion cum modernization schemes. We will do further fund raising only after we achieve certain progress on the ongoing projects.
When do you expect to commission the thermal power project?
The expected Commercial Operation Date for the thermal power project is April1, ‘12.
What is your share in the market?
We have a market share of roughly around 7% to 9%. Denim is expected to do well. Spinning should also improve as it has already passed through its bottom.
What are the challenges and opportunities in this sector?
Indian textile has become a tough industry, with strong cyclicality, pervasive pressure across the value chain, overall reduction in price due to overcapacity and immense competition. Yet it is also an industry in emergence, with increasing reputation in global markets, emerging SMEs and more foreign direct investments.
What is your current capacity and utilization?
Company has a spinning unit at Amanagallu with a capacity of 60000 spindles and denim fabric manufacturing unit with a capacity of 40 million meters. Both are operating at 95% capacity utilization.
Give us a break up of various segments. Any new segment you plan to enter?
At present company has spinning and denim segment and is in the processes of setting up captive power plant which will add one more segment.
Brief us about your financials?
The turnover had registered an increase of 28% over the corresponding period in the previous year. The company has made a turnover of Rs 1.62bn during the quarter ended 30th June, 2011 as against Rs 1.26bn in the corresponding quarter during last year.
The profit after tax also has shown an increase of 31.96% over the corresponding period in the previous year. The company has made a profit after tax of Rs 96.2mn during the quarter ended 30th June, 2011 as against Rs 72.9mn in the corresponding quarter during last year.
What is the total workforce?
We have a total strength of 3500
What is the promoter holding?
Our current promoter holding stands at 61.12%