Arvind Mills profits slip 75%

CORPORATE SCORECARD

Arvind Mills has posted 75 per cent dip in quarterly net profit inspite of registering 35 per cent growth in sales, due to the sluggish conditions in the international denim markets.

The Ahmedabad-based integrated textiles company has large exposure to the export markets, where a situation of plenty has been forcing the players to concede price cuts, an analyst said. "Arvind's sales in the international market went down in the fourth quarter," he added.

The company expects to tide over the situation at the end of this year. "The revenue and earnings of the company are on expected lines. The efforts put in by the company to tide over the current situation have shown encouraging initial results and we are hopeful of a better 2007-2008," Jayesh Shah, director and chief financial officer of the company was quoted in a statement on the BSE's website.

Industry sources said the coming quarters would not be different, unless the company diverts it products to the domestic denim market, where the price margins are better. "However, the diversion will not be easy for the company," they added.

In the quarter ended March 31, the company's net profit went down to Rs 5.4 crore from the corresponding quarter's Rs 21.47 crore. The company's net sales, during the period went up from Rs 357.75 crore to Rs 483.13 crore.

The operating profit declined by 9.53 per cent to Rs 83.56 crore from Rs 92.36 crore last year. The earnings per share (EPS) stood at Rs 0.22 compared with Rs 0.98 in the corresponding quarter.

On an annual basis, the company's net profit for the year ended March 31 came down to Rs 119.56 crore from Rs 127.16 crore last year. The net sales registered an increase of 15.89 per cent at Rs 1,844.91 crore compared with Rs 1,592 crore in the previous financial year.

The figures for the current financial year are not comparable to the previous year's figures as the current year figures include the performance of Arvind Brands which was merged into the company with effect from 1st April 2006, the company said in a statement.