Notes from Q2 results call.
Capacity as of Sep 2022:
Spindles – 332000;
Rotors – 3488
Airjet Weaving Machine – 168
Circular Knitting Machine – 63
Production capacity as of Sep 2022:
Yarn – 75000 TPA → Proposed to add 1.55 Lacs of Spindles (totoal to be 4.87Lac Spindles) to make it 110000 TPA
Woven Fabric – 30 Mill meters → Proposed to be 40 Mill meters
Knitted Fabric – 8500 TPA → Proposed to be 11000 TA
CAPEX plan execution:
Weaving and knitting capacities will be ramped up within this year i.e. by end of 2023.
Spinning capacity will be ramped – 50% by Q1 2024 and other 50% by Q2 2024.
Debt drawdown for Q2 from teh planned 900Cr CAPEX was only 20Cr. Expect this to be 70-80Cr in Q3.
Export profile in H1 2022:
Bangladesh: 20%
EU: 24-25%
North America: 10%
South America: 10%
China: 10-12% but has come down due to 2-3% due to COVID situation
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US demand has gone down due to inventory reduction pressure on customers due to perceived upcoming recession
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EU demand has gone down due to their inflation and Euro depreciation situation causing the higher costs of imports
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Demand for woven product is good while demand for knitted is not good. Latter is a cause of concern for management and working on it but no traction so far. Management is focusing on high value/high margin products to compensate the low demand for knitted fabric.
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Capcity utilization is being ramped up slowly and will be to normal level by Jan 2023.
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Business scenario still depends on the cotton season production and new produce levels, however the cotton cost is coming down though ncertainty exists. Demand pickup still remains an uncertainty.
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In summary though situation is normalizing, there is still uncertainty remains in business environment. Expectation is it gets normalised in Q4.
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