Export performance of denim companies boost Q3 profits

Indian denim manufacturers are facing low demand and oversupply situation in the domestic market. But their efforts to explore untapped export destinations, companies like Arvind, Nandan Denim (NDL) and KG Denim were able to book profits in the third quarter of fiscal 2014. They also invested in capacity expansion of their units to cater to export orders for value-added products, which helped them perform well during the quarter under review.

Focus on exports boosts margins

NDL was able to increase its net profit by whooping 38 percent for third quarter ended December 31, 2014 of fiscal 2015-16. Driven by its export performance, the company, a part of Chiripal Group reported a Q3 net profit of Rs 12.63 crores in FY '15 against Rs 9.15 crore in the corresponding period last year. Net profit of another leading player, KG Denim too soared 215 percent in Q3 for FY'15 against a net profit of Rs 1.62 crore for the same quarter, last year. The company reported a net profit of Rs 5.11 crore for the corresponding quarter ended December 31, 2014.