Suryalakshmi makes Rs 50cr growth plans

Company reports 24% growth in turnover at Rs 305 crore; board declares dividend of 25%

City-based Suryalakshmi Cotton Mills has announced an investment of Rs 50 crore this fiscal in its spinning and denim divisions to enhance capacity.

The spinning and denim major is targetting a turnover of Rs 500 crore in the next two years, once the expansion of its denim and yarn capacities are completed.

In order to take advantage of the boom in the textile sector, Suryalakshmi has increased its production capacity to 20 million metres per annum. The investment of Rs 50 crore will enhance the spindlage by 29,000 spindles and the denim fabric capacity by about five million metres.

The company is also expected to apply to the government for more funds under the technology upgradation fund scheme (TUFS).

"We have already been sanctioned Rs 9 crore from TUFS and we will apply for more," a company official told Business Standard.

Suryalakshmi Cotton Mills has about Rs 53 crore in free reserves.

"In 2004-05, we expect to record a turnover of between Rs 375 crore and Rs 400 crore taking advantage of increase in production capacities as well as the favourable market conditions," the official said.

The company has earmarked 7,000 spindles for the production of high value-added compact yarn and is also slated to come out with a range of shirt-denim fabrics catering to the requirements of leading brands in the country.

For the year ended March 31, 2004, has reported a 24 per cent growth in turnover which touched Rs 305 crore, while earning per share was Rs 18.76 as against Rs 11.68 for the previous year. The board of the company has recommended a dividend of 25 per cent for the year.

Net profit for the full year touched Rs 16.78 crore as compared to Rs 11.43 crore for the previous year. Interest charges came down from Rs 15.21 crore in 2002-03 to Rs 13.06 crore for 2003-04.

The company in a statement said that the interest savings Rs 2 crore were on account of IDBI and other financial institutions reducing the interest rates on term loans and working capital funds availed.

Profit before tax for the full year touched Rs 21.48 crore, a growth of 66 per cent over the previous year. The exports from the company grew 61 per cent to touch Rs 70 crore. Suryalakshmi has been exporting a variety of high value added yarns to markets like Mauritius, Korea and Hong Kong.