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Loyal Textile Mills (LTM) has become a zero-debt company after repaying its loan outstanding of more than ₹50 crore, supported by better operating environment.
“We had a term loan outstanding of ₹52.98 crore as on March 31, availed from banks and financial institution. We have repaid entire term loans this month, including payment of ₹27.59 crore in advance. Now, our company has reached the status of zero debt company (term loan),” the company said in a communique to the stock exchanges.
“Loyal Textile Mills had consistently reduced the term loan obligations over the last few years with no major debt funded capital expenditure. As a result, the overall gearing improved, however it stood moderate at 1.52x as on March 31, 2021 against 1.81x as on March 31, 2020,” said a recent report by CARE ratings.
Net profit
The company reported a significant increase in its consolidated net profit at ₹31.24 crore for the quarter ended September 30, compared with the consolidated net profit of ₹6.18 crore in the year-ago quarter on the back of strong growth in revenues. Consolidated revenues grew 71 per cent at ₹460.90 crore( ₹269.48 crore).
The improved growth prospects for the textile industry post the first wave of the pandemic, with the increased demand for cotton textiles, is driving growth for companies like LTM.
“In view of the improved operating environment, LTM has been reporting healthy profits in recent quarters and is expected to remain so in the near terms. The profits have been used towards debt reduction, with prepayment of debt as well,” said the report.
Oldest mill in South
LTM is one the oldest mills in South India having more than seven decades of track record with an established presence both in international and domestic markets. The company has four textile mills, one process house and a garment division.
It generates more than two-thirds of sales from export markets, which include the US, Europe, West Asia and Asia. In 2020-21, exports accounted for 72 per cent of its revenue from operations of ₹1,122 crore.
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