Q1 results: The good news continues for India Inc

Wednesday, 11 August 2010
altFaced with pricing pressures, Gokaldas Exports has posted a loss of Rs 17.7 crores in the first quarter this year as against a net profit of Rs 2.8 crores in the same quarter last year. In fact, the company clocked a marginal rise in turnover for the first quarter ended June 30, 2010, at Rs 228 crores, from Rs 223 crores in the corresponding quarter last year.

  Interestingly, Gokoldas Exports is one of the few Indian companies to have reported a loss this quarter. The spate of Q1 results that have been declared in the past few weeks has unfolded a positive story for most domestic textile companies and apparel retailers.

Taltextile and retail major Raymond net loss for the first quarter ended June 30, narrowed down by 25 per cent to Rs 24 crores from Rs 32 crore in the previous year. Net sales too rose to Rs 240 crores during the April-June quarter as against Rs 234 crores in the same period last fiscal. The company’s textile business posted a growth of 29 per cent at Rs 238 crores on the back of higher volumes and improved realizations consequent to the buoyancy in the Indian market. Similarly, the branded apparel business witnessed a 20 per cent jump in sales to Rs 149 crores. Overall Raymond's retail business grew 13 per cent quarter-on-quarter.

Bombay Rayon Fashions posted a net profit of Rs 52.17 crores for the quarter ended June 30, up 40 per cent from the same period last year. Their net sales increased by 49.47 per cent to Rs 50.27 crores from Rs 33.63 crores in the corresponding quarter last year. The other company to record positive growth is Arvind, the country's largest denim manufacturer. It reported a profit of Rs 20 crores for the quarter ended June as against a loss of Rs 3 crores in the corresponding period a year ago. The growth has been driven by both branded apparel and retail business segment, which has registered a 66 per cent growth in revenue terms and 103 per cent growth in operating profits.

Kewal Kiran Clothing makers of Killer jeans and well-known for their K-Lounge retail chain has reported a sales turnover of Rs 45.41 crores and a net profit of Rs 8.85 crore for the quarter ended June 2010.  Growth is 35 per cent higher than the last year. CMD Kewal Jain says their revenue is coming through MBOs, K-Lounge, exports and departmental stores. The retail business is generating 32 per cent of the total net revenues through retail and overall revenues through four channels.

As for Gokaldas’s not so positive results, Managing Director Rajendra Hinduja, explains it by saying the apparel export industry is still not out of the woods due to high raw material prices and wage increases. Moreover, while the order position has improved, pricing pressures remain. What’s more the sluggish EU markets, forex situation and high cotton prices also remain worries. However, he is more positive about the Q2 and Q3 figures. Perhaps what makes him and other apparel exporters positive is the Chinese currency appreciation, wage hike in Bangladesh, and withdrawal of GSP concessions to Sri Lanka.

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