The Hindu Business Line : Indian Rayon net up 24.7 pc

BETTER employment of funds and lower interest rates helped Indian Rayon notch an improved performance over last year. For the year ended March 31, 2004, net profit rose 24.76 per cent to Rs 131.3 crore over Rs 105.3 crore in the year ago period.

Turnover rose to Rs 1,573.83 crore (Rs 1,442.4 crore) and other income was at Rs 14.3 crore (Rs 10 crore).

Interest expenses fell 45 per cent to Rs 24 crore due to repayment of loans, better working capital management and lower interest rates. Interest income was lower at Rs 9.2 crore (Rs 22 crore) as in the previous year Rs 9.6 crore was received as interest income on Income Tax refunds and Rs 5 crore on debentures allotted on the demerger of the insulators business.

During the year the company gained Rs 19.95 crore on the sale of its shares in Indo Gulf Fertiliser Ltd. The board recommended a dividend of 40 per cent (37.5 per cent). The company will also pay a dividend tax of 12.81 per cent. The dividend outgo will be Rs 27.02 crore.

The Rayon Division revenues were at Rs 335.17 crore (Rs 338.02 crore), despite VFY sales volumes growing by 272 tonnes and capacity utilisation at 107 per cent. According to the company, realisations were affected by the industry-wide high stock levels built at the time of weavers' and transporters' strike. The import of low-price yarns from China further affected sales.

The Garments Division's (Madura Garments) revenues grew to Rs 391.94 crore (Rs 326.07 crore). Sales volumes rose to 74.3 lakh pieces.

The company says the long-term outlook is encouraging. However, competition has grown with the entry of global brands and new players for prime retail space. To augment profitability, it will focus on brand equity, move towards lifestyle solutions for its power brands and reinforce Peter England as a mega brand.

The Carbon Black Division's revenues stood at Rs 340.30 crore (Rs 327.83 crore). Sales grew due to higher exports and the growth of the auto and tyre industry. Margins may remain under pressure in future due to the removal of the duty differential between carbon black feed stock (CBFS) and Carbon Black, cheaper imports, rising trend in CBFS prices and sea freight.

The textiles division's revenues rose 12.9 per cent to Rs 393.2 crore (Rs 348.3 crore). Realisation in the worsted segment was pressured as wool process could only partially be passed on to customers.

The Insulator division revenues stood at Rs 72.52 crore. The Birla NGK Insulators Pvt Ltd reported a turnover of Rs 163.67 crore. A capex of Rs 57 crore will add capacity and improve quality.

Birla Sun Life Insurance Company recorded a 274 per cent jump in premium income of Rs 537.5 crore and annualised premium grew 253 per cent to Rs 462.6 crore.

The software business grew 21 per cent to Rs 86 crore. Revenues from the BPO business grew to Rs 69.43 crore (Rs 27.50 crore). Its third call centre has become operational at Bangalore, which has increased the staff strength by 800 to 1,600.