KPR Mill Ltd, the Coimbatore-based textile company, says demand for both yarn and garments are good with the company carrying garment orders worth ₹1,100 crore, according to its Managing Director P Nataraj.

The order book is at an all time high now, and a lot of inquiries are going around. Large garment players are doing well in the Tirupur region; only the smaller players are having issues. There is a little sluggishness in the yarn business in margins, but volume is good. The margin will be little lesser than the regular margins, the company’s Chief Financial Officer PL Murugapppan, told analysts while discussing the company’s third quarter financial results recently.

PL Murugapapan said the company added Walmart as its for US exports, and increased the volume to GAP for both the US and European destinations. “We have added GAP as a major customer during this quarter in both the US and Europe,” he added.

During the nine months ended December 31, 2023, overcoming various challenges, KPR generated a consolidated revenue of ₹4,418 crores and net profit of ₹592 crores. The factors that impacted the financials during the period were fall in cotton prices resulting in reduced selling price for yarn during the quarter. The fall in yarn margin was also due to subdued demand at international markets, he said.

Garment shipments were held up during December due to recent cyclones in Tamil Nadu - in both Chennai and Tuticorin port areas. Nearly four million garments worth around ₹100 crore were held up . “We thought that it will be more during this quarter,” he said.

The government banned the use of sugar juice for the manufacture of ethanol to regulate sugar prices. However, the current quarter appears to be encouraging and the company’s modernization and expansion plans would support the growth. Strong financial position and comfortable cash flow continues, said Nataraj.

On the company’s expansion, the company is expanding the garment processing capacity with an outlay of ₹250 crores, along with the solar power plant ₹100 crores with the capacity of about 25 MW. With this our solar and wind capacity will reach about 100 MW. KPR already has a capacity of about 100 megawatts, said Murugappan.

“We are not seeing much of an impact on the Red sea issue because most of our exports are all FOB [Fee on Board] basis -- where the customer takes responsibility for the shipment -- mainly garment.