Hyderabad, July 3
Avon Organics Ltd has achieved a turnaround during the fiscal ended March 2006 with a net profit of Rs 3.64 crore on a turnover of Rs 98.2 crore as against a net loss of Rs 1.08 crore on a turnover of Rs 89.1 crore in the previous fiscal.
In a press release here on Monday, the company said the turnaround was achieved through a combination of better cost-control and change in product mix.
The company said it has initiated new projects involving an investment of Rs 20 crore to expand capacities, add new products and achieve backward integration to improve competitive position in the market. To part finance this, the company had gone in for a preferential issue of 21.2 lakh equity shares in March at a price of Rs 48 per share to raise Rs 10.18 crore. The company proposes to fund the balance through internal accruals and debt, the release said.
On account of expansion and backward integration programme, the company expects to significantly improve its sales and profitability during this current fiscal. However, the company's Managing Director, Mr P.R. Agarwal, said, "the real benefits of these initiatives will be realised in the next financial year."