Sangam Q2 net profit up 200%

Sangam (India), a leading player in Polyester Viscose (PV) dyed yarn segment in

India, posted a 200 per cent rise in net profit at Rs 18.09 crores for the second quarter ended September 30, 2012 as compared to Rs 6.03 crore in the corresponding quarter previous year.

Net sales during this period grew by 2.2 per cent to Rs 384.06 crores as compared to Rs 375.64 crores in the corresponding previous quarter. Slower growth in turnover is attributed to completion of road toll collection projects. Further, a decline in raw material prices has improved operating profit by 44.5 per cent to Rs 60.83 crores as compared to second quarter last year. Lower interest charges have led to an improved the profit after tax.

Commenting on the results, R P Soni, Chairman, Sangam (India) said, “Better realisations, higher volumes and value-added products have transformed into a better performance for this quarter and we expect this growth to continue. Globally, Indian apparel sector is affected due to the slowdown in western markets and to reduce dependence on them, we have explored new market by participating in trade exhibitions and holding road shows in new markets like South Africa and Latin America, keeping the growth momentum.”

The company has posted an 11.5 per cent rise in net sales at Rs 795.15 crores for the half year ended September 30, 2012 compared to Rs 713.20 crores in the corresponding period previous year. Higher realisation coupled with volume growth in the dye yarn segment and denim segment contributed to a higher turnover.

Sangam has completed its Rs 180 crores expansion plan by installing additional 16 ml capacity for denim fabrics, 1824 rotors for open ended spinning along with of 3,000 mtpa knitting capacity and 7200 mtpa texturising yarn capacity at its existing facilities at Bhilwara, Rajasthan. Further, it has also modernised its processing division by replacing new processing machines. This expansion project worth of Rs 180 crores has been financed through a mix of term loan and internal accruals.