Indo Rama Synthetics posts drop in top line in Q4 and FY’14

India’s largest polyester manufacturer, Indo Rama Synthetics (India) Limited, announced its audited results for the Quarter and financial Year ended March 31, 2014 on 20 May. For the quarter ended 31 March, 2014, the company’s net revenue stood at Rs 693.47 crore as against Rs 706.99 crore of Q4 of previous year.

The EBIDTA for the period stood at Rs 56.38 crore compared to Rs 22.19 crore for the corresponding quarter in the previous year. Net loss for the period stood at Rs 14.17 crore as compared to a loss of Rs 38.06 crore in Q4 FY13.

For the financial year ended 31 March 2014, the net revenue stood at Rs 2629.12 crore as compared to Rs 2910.13 crore in the previous year. For full year, EBIDTA stood at Rs 145.08 crore as compared to Rs 243.19 crore in the last fiscal year. Net loss for FY14 stood at Rs 8.18 crore as against profit of Rs. 41.26 crore during last financial year.

According to a press release, the 2013-14 financial year saw slow demand for the polyester industry in India as well as overseas. The industry faced lots of economic challenges in term of squeezing of margin due to the high prices of raw material along with the interrupted supply. The year also witnessed one of the worst phases for the rupee and fluctuation in the crude oil prices have led to the squeezing of margins. However these prices weren’t passed to the customers thus forcing the margins to be lower.

In India, the per capita man-made fibre consumption is low at 3.0 kg per annum, as against the global average of 8 kg per annum. This indicates the untapped potential for the polyester manufacturers, providing scope to grow positively in the coming time.

Indo Rama has demonstrated its resilience in the challenging economic times last year in the adverse conditions. The company has also taken some cost improvement initiatives, which will further add to its competitiveness. With polyester prices bottoming out and rupee stabilizing, the company expect the sentiments and performance to improve in near term.

The company has been successful to make optimum utilization of available resources so as to keep up its operational efficiencies. It hopes to see improvement in the overall economic environment that should help the company to perform better in the coming year. With the demand looking up in the coming year, it projects that the following quarters will be better than the last.

Mr. O. P. Lohia, Chairman & Managing Director, Indo Rama Synthetics (India) Ltd. while commenting on the performance said, “On the back of India’s burgeoning population, rapid urbanisation, enhanced industrialisation, increasing cotton prices and insignificant cotton production growth, I am hopeful that polyester consumption will increase substantially in the coming years. While entire world is fighting economic downturn we have been withering the tough environment and have been strengthening our cost competitiveness by virtue of cost rationalization . With the new government at the centre, we hope that much needed impetus shall be generated that will bolster interest in this sector and enable creation of new jobs, pushing up GDP growth and bringing alive the dream of inclusive growth.