The Hindu Business Line : Arvind Mills PAT down 85%

A company release said here that sales declined to Rs 355 crore against Rs 417 crore in the corresponding quarter last financial year. Its profit before tax (PBT) dipped 86 per cent to Rs 7 crore (Rs 50 crore) and PAT to Rs 7 crore (Rs 45 crore). Operating profit declined to Rs 84 crore (Rs 112 crore) The demand-supply mismatch in the domestic market is hampering the company and it will take some time before the situation improves. Export market, which had witnessed a slight downturn in 2005-06, has now started looking up with the volumes from the international brands coming back to normal levels.

Contribution from the garmenting operations increased to 17 per cent of the turnover as compared to nine per cent in the corresponding quarter in 2005-06.

The branded garments business of the company under Arvind Brands Ltd continued to show a robust growth with the sales growing by 19 per cent to Rs 75 crore (Rs 64 crore). This was mainly contributed by the growth in sales of some existing brands as well as the new brands added to the portfolio such as Nautica and Gant.

Mr Jayesh Shah, Chief Financial Officer and Director, said the performance of the company was severely affected by the downturn in the denim market. The company is taking appropriate long-term strategic actions to address the current situation, the release added.

The company has streamlined its operations at the jeans factory in Bangalore and the productivity levels are continuously improving. The learning curve and the current order book have given the confidence to the company to double the installed capacity to eight million pieces by March 2007. The outlay for this expansion would be nearly Rs 20 crore.

It said, on the raw material side, the company continued to benefit from the inventory of low-cost cotton which it had been holding and will maintain the cost at current level for whole of the current financial year.

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