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Our Bureau

Hyderabad , Jan. 31

VIJAY Textiles Ltd (VTL), the Hyderabad-based manufacturer of furnishings and upholstery fabrics, has recorded 68 per cent growth in turnover and over ten-fold growth in post-tax profit for the third quarter of current fiscal ended December 2004, thanks to the upgradation of technology that resulted in value-added products, increased production capacity and decreased value loss.

For the quarter under review, the company posted a turnover of Rs 24.41 crore as against Rs 14.52 crore in the corresponding quarter of previous fiscal and a net profit of Rs 4.17 crore (Rs 35.83 lakh), yielding an EPS (earnings per share) of Rs 12.53 (Rs 1.08) on an equity base of Rs 3.32 crore (Rs 3.17 crore).

For the nine-month period, the company posted a net profit of Rs 6.7 crore (Rs 1.11 crore) on a turnover of Rs 61.02 crore (Rs 47.08 crore), yielding an EPS of Rs 20.14 (Rs 3.36).

The company has recommended an interim dividend of 40 per cent for the current fiscal. In a bid to improve the liquidity, the company has also decided to go in for a stock split and revised the face value from the present Rs 10 each to Rs 1.

Addressing a press conference here on Monday, the Chairman and Managing Director, Mr Vijay Kumar Gupta, attributed the better performance of the company to its new business strategy of directly tapping the retail market in an aggressive manner through owned stores.

The company has decided to set up three more retail stores in the State in the next couple of years at Hyderabad, Visakhapatnam and Vijayawada. Further, the company is currently considering a few franchise offers received from the US and expects to set up the first franchise store in the US during the first half of next fiscal.

Stating that the details of the expansion programme, estimated to cost around Rs 50 crore, would be finalised shortly, Mr Gupta said all the three new retail outlets in the domestic market would be operational by the second half of next fiscal.

The company, which currently has a reserves base of Rs 18.45 crore, expects the reserves to go up to around Rs 25 crore by the current fiscal-end with the help of ploughing back the profits. The balance funds for the proposed expansion would be raised from the capital market in the form of fresh issue of shares and term loans from the financial institutions.

Meanwhile, the company is also considering various options to increase the public holding in the company, aimed at improving the liquidity levels, Mr Gupta said.

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