The Hindu Business Line : Expansion drives up Nahar Spinning

THE Nahar Spinning stock has seen a gain of around 200 per cent in 2004 in response to the company's proposed expansion plan, which will raise its spindle capacity by over 25 per cent.

Mr Jawahar Lal Oswal, Chairman of Nahar Spinning Ltd, told Business Line from Ludhiana on Tuesday that the company has undertaken a 25,000-spindle expansion-cum-modernisation project at a cost of Rs 112.45 crore near Patiala.

"The plant will be operational by June this year. The project is being funded by SBI to the extent of Rs 80 crore under the Technology Upgradation Fund Scheme (TUFS)," Mr Oswal said.

Balance would be financed by internal accruals.

The cotton, synthetic and blended yarn manufacturing and exporting company has a current total spindles capacity of 93,408.

Mr Oswal further said that the 3.5-MW co-generation power plant near Ludhiana would be ready by September 2005. This Rs 16 crore-project would be funded by the company internally.

According to Mr Rajesh Agarwal of CD Equisearch, the TUFS interest rate of 2.5 per cent and cheaper power after the captive unit gets operational will bring down the cost of production. The current projects would make the company better equipped to compete in the international market in terms of cost, quality and quantity in the post quota regime.

As of now, around 60 per cent of the company's sales turnover is accounted for by exports.

The garment segment recorded a rise in sales and margins in the recent months.

At today's closing price of Rs 263.80, the stock traded around 15 times its expected earnings for the current fiscal and 0.76 times its book value of Rs 350.50, Mr Agarwal said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Tech funds lag benchmark

Sideways movement

Overseas terminals for Indian stock exchanges mooted

IDBI Bank up on merger ratio hopes

Expansion drives up Nahar Spinning

Short-term reversal likely in Gujarat Ambuja, i-flex

SEBI suspends regn of PSE member

Index heavyweights drag Sensex marginally

Allahabad Bank to work out issue details