The Hindu Business Line : Raymond Q1 net dips to Rs 3.14 cr

RAYMOND Ltd has recorded a lower net profit at Rs 3.14 crore for the first quarter ended June 30, 2004, compared to Rs 20.92 crore recorded in the corresponding quarter in the previous year.

The reduced profit has been attributed to the depreciating rupee, which resulted in foreign exchange loss of Rs 9.82 crore (against a gain of Rs 3.52 crore in the previous corresponding period), higher interest charges of Rs 4.88 crore (net interest income of Rs 2.68 crore), and higher raw material costs.

The profit before tax for the first quarter ended June 30, 2004, was also lower at Rs 5.14 crore (Rs 26.42 crore).

However, gross sales grew to Rs 199.65 crore (Rs 185.50 crore) despite the continued recession in the market.

The textile division maintained revenue in value at Rs 107.77 crore (Rs 107.53 crore) and in volumes at 38.7 lakh metres (40.3 lakh metres) despite a marginal drop in domestic demand.

According to a company release, profitability of the division was affected by an increase in the cost of raw material.

The sales of the Textile Division, which contributes substantially to the company's total sales and profitability, are seasonal and a bulk of its high-value fabric despatches take place during the later part of the year.

The denim division recorded a marginal increase in revenue in value at Rs 47.46 crore (Rs 40.28 crore) and in volume at 43.4 lakh metres (39.6 lakh metres).

The performance of the division was affected due to a steep increase in cotton prices, the release said. The files division recorded sales of Rs 33.13 crore (Rs 26.34 crore), but the performance of the division was affected due to a steep increase in the cost of steel, its main raw material.

The board has approved a proposal to set up an additional trouser line in its Bangalore-based wholly owned subsidiary, Silver Spark Apparel Ltd, with a capacity of 1,000 trousers per day at a total outlay of Rs 2.6 crore.

The board also approved a proposal to set up a new facility in Bangalore for the manufacture of formal shirts, with a capacity of 3,000 shirts per day, at a total project cost of Rs 13.57 crore.

The project will be implemented through a new company, and will commence operations from March 2005. Both the proposed projects would cater to the domestic and export market.