Damodar Industries witnessed a 50 per cent growth in net sales during quarter ended September 2013, driven by robust export revenues amidst increased demand for the value-added yarn from China and rupee’s depreciation against the US dollar.
The company, one of the largest producers of value added yarns in India with 6 manufacturing facilities, saw its net sales surging to Rs 189.34 crore in Q2 FY14 from Rs 125.11 crore in the corresponding period of last fiscal. The company currently exports to over 40 countries across Europe, South Africa, South America, Australia, Korea, Belgium, Singapore, Italy, Egypt and the Gulf countries.
Damodar’s net profit also registered a growth of 58.5 per cent in the quarter at Rs 5.3 crore versus Rs 3.34 crore in the year ago period. In line with the topline growth, EBITDA also grew by 44 per cent during the period at Rs 16.3 crore as against Rs 11.35 crore in the corresponding quarter of previous fiscal.
Thanks to sky-high labour costs in China, value-added yarn makers in India have been witnessing robust growth in demand from the East Asian country. Indian yarn exports have jumped by around 68 per cent in previous eighteen months.
Rising input costs however weighed upon Damodar Industries’ EBITDA margin in the Jul-Sep quarter. The company’s EBITDA margin dropped to 8.6 per cent from 9.1 per cent in the year ago period, as prices of key raw materials like PTA and MEG increased sharply.