Denim players witness positive Q1

Despite oversupply of stocks and continuous rise in production capacity, Indian denim

brands recorded double digit growth in their bottomline for the first quarter of fiscal 2013-14. Major players like Arvind, KG Denim and Nandan Exim were able to post over 20 per cent growth in their net profits for the quarter.

For instance, while Arvind’s overall standalone net profit growth was 75 per cent at Rs 79.35 crores, its textile segment registered a bottomline growth of 46.17 per cent at Rs 149.52 crores. Similarly, at Rs 3.63 crore, KG Denim’s Q1 net profit for fiscal 2013-14 grew by 77 per cent as against Rs 2.05 crore for the corresponding period last year. Even Ahmedabad-based denim company Nandan Exim registered a 45.19 per cent increase in its first quarter net profit at Rs 9.51 crore.

However, the oversupply did take a toll on net profit as well as income generation for Q1 of FY ‘14 of Aarvee Denims & Exports. The Ahmedabad-based denim maker registered a decline in net profit of 72 per cent at Rs 3.70 crore as against Rs 13.24 crores for the corresponding period last year.

The growth depicted in first quarter results is mainly because prices of cotton remained stable through the period. Even demand remained constant. Industry players are now expecting the second quarter results to show better results than the first quarter.