Rai Saheb Rekhchand Mohota Spinning & Weaving Mills Ltd swung to profit in the quarter and half-year ended September 2013 on back of robust yarn demand from China and better sales realizations with sharp depreciation in rupee against US dollar.
The flagship company of the Mohota Group reported a net profit of Rs 26 lakh in quarter ended September 2013 as against net loss of Rs 23 lakh in the corresponding quarter of previous fiscal. Its turnover during the quarter also increased sharply by 48 per cent at Rs 7,263 lakh in Q2 FY4 from Rs 4,901 lakh in Q2 FY13.
For the six months ended September 2013, the company’s net profit stood at Rs 73 lakh as against net loss of Rs 41 lakh in the year ago period.
Yarn makers gained from robust Chinese demand in the first half of FY14 due to high yarn manufacturing cost vis-à-vis Indian counterparts. Chinese manufacturers imported over 100 million kg of yarn from Indian manufacturers until the end of September, 2013.
RSR, which has evolved from a meager capacity of 500 tons of yarn, 100000 meters fabric per annum to a huge size of 10000 tons of yarn and 20 million meters fabric per annum, is expected to continue the growth momentum, mainly as China demand remains robust and rupee remains weak.
The company’s weaving division is also expected to drive the growth with booming organized retail in the country.
