The Hindu Business Line : Bombay Dyeing net down at Rs 26.56 cr

BOMBAY Dyeing reported a net profit of Rs 26.56 crore for the year ended March 31, 2005 against Rs 53.50 crore in the year-ago period. Income from operations was Rs 1,145.31 crore (Rs 1,009.01 crore), while other income was Rs 23.80 crore (Rs 60.85 crore).

According to a company press release, the drop in profit was caused by severe pressure on the margins of the textile and DMT (dimethyl terephthalate) divisions and a fall in other income due to a general increase in interest rates, which impacted security prices.

The net sales of the DMT division was Rs 635.02 crore (Rs 514.14 crore). While the margins were reasonable in the first nine months, the financial performance in the last quarter was affected by a drop in DMT prices, resulting from a fall in the price of paraxylene, a major raw material. The Customs duty reduction for DMT from 20 per cent to 15 per cent in this year's Budget has also aggravated the situation.

The turnover of the textile division for the year was Rs 406.92 crore (Rs 422.10 crore). Its results were affected by higher raw material prices and the sudden and sharp reduction in the Duty Entitlement Pass Book rates. While the removal of quota constraints from January 2005 opened up substantial export opportunities, it also led to intense competition among exporting countries looking for higher access to the US market. The board has recommended a dividend of Rs 4 per equity share of Rs 10 each for the year ended March 31, 2005.

The textile division plans to renovate its existing retail shops to increase footfalls and also register its presence in malls and high street centres. The new show rooms will have an extended product range in the bed and bath category. It is also restructuring its manufacturing base by setting up a processing and stitching facility in Maharashtra.

Anticipating limited opportunities for sale of DMT with the advent of new continuous polymerisation plants and PTA capacities in the country, the division is setting up a 1.65-lakh-tonnes-per-annum PSF plant at the existing DMT plant site, which would be operational in the third quarter of 2006.

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