Foreign exchange losses worth Rs 38 crore at Arvind Limited kept in check the company's consolidated net profit growth for the third quarter ended December 31, 2011 over corresponding period last year at eight per cent.
One of the largest integrated textile, apparel and branded apparel player, Ahmedabad-based Arvind Ltd posted a consolidated net profit from ordinary activities of Rs 52 crore for the current third quarter of fiscal 2011-12 as against Rs 48 crore in Q3 2010-11.
According to the company, the growth in profits came even after writing off Rs 38 crore foreign exchange losses during the quarter.
"Last year we had registered foreign exchange gains as part of the Rs 48 crore net profit. However, this year with rupee depreciating to Rs 53 against dollar in December 2011, we had to write off losses," said Jayesh Shah, director and chief financial officer, Arvind Ltd.
However, the net profit after extra ordinary income stands at Rs 243 crore as company earned extra ordinary income of Rs 191 crore (net of tax) from sale of its stake in joint venture (JV) company VF Arvind Brands Pvt Limited.
In terms of revenue, Arvind's saw an increase of 19 per cent to Rs 1190 crore this quarter from Rs 1004 crore in Q3 of FY' 2011, while EBIDTA improved 40 per cent to Rs 180 crore from Rs 128 crore of corresponding period last year.
"The revenue growth of 32 per cent in Branded Apparel and Retail business segments and 21 per cent revenue growth in textile business were the key drivers for improved financial performance at the consolidated level. We hope to achieve 18 per cent growth in revenue during current financial year. While cotton prices have softened, the selling prices have adjusted downwards ahead of full benefit of lower cotton prices which may marginally impact the operating margin in the fourth quarter," said Shah.
Meanwhile, with its established business continuing to do well, Arvind is focusing on advance materials and technical textile segments and new growth engine.
