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Raymond posts Rs 40.83-cr net in Q2

Our Bureau

MUMBAI, Oct. 29

RAYMOND Ltd (Raymond) has announced a $3-million acquisition in Portugal, besides a net profit of Rs 40.83 crore for the quarter ended September 30, 2001 (second quarter), as against a loss of Rs 151.70 crore in the same period the previous year.

The company's Q2 net sales/income from operation slid to Rs 294.99 crore (Rs 444.40 crore). Total expenditure was Rs 228.46 crore (Rs 371.11 crore), interest Rs 4.17 crore (Rs 30.14 crore), depreciation Rs 12.99 crore (Rs 24.13 crore) and provision for t ax Rs 14.78 crore.

``The result of restructuring and making ourselves focussed is now being felt,'' Mr Gautam Hari Singhania, Chairman and Managing Director, Raymond, said at a press briefing. Officials maintained that even if the loss due to exceptional items in the previ ous quarter is kept aside, Raymond did well in Q2.

Profit before tax and exceptional items in Q2 was Rs 55.92 crore (Rs 24.25 crore).

``The first-half, which is not seasonal, has been good for textiles, our biggest business portfolio since restructuring,'' Mr Pradeep Bhandari, President (Corporate), Raymond, said.

There has been a 10 per cent rise in Raymond's domestic textile volumes besides gain in market share. With the festive season falling in Q3, the usual sales surge should happen in the coming months, Mr Nabankur Gupta, Group President, Raymond, pointed ou t.

Advertising support for the garments business has been hiked by 20 per cent, to Rs 20 crore.

Mr Singhania said he expected in 2001-2002, a 15-20 per cent growth for the company's garment business in terms of value and a 10 per cent similar rise for the textiles business.

Raymond remains open to acquisitions. `` At a particular price, we are buyers provided it brings value to us and our shareholders,'' he said. But he did not expect the domestic textile sector's consolidation to throw up opportunities.

``The domestic sector is going to take its own time to consolidate. We don't see our growth coming necessarily from manufacturing,'' Mr Singhania said.

Of the Rs 1,100-crore gained through earlier divestment of non-core businesses, Raymond still has Rs 550 crore in cash. The rest of it was used to retire high-cost debt, a further Rs 70-75 crore due for retirement in the next six months. ``Come March 200 2, most of our high-cost borrowing would have been repaid,'' Mr Bhandari said.

The company has total borrowings of roughly Rs 500 crore.

Raymond had divested its steel and cement divisions in September 2000 and January 2001, respectively.

It is currently expanding denim capacity from 11.5 million metres to 16.5 million metres at a cost of Rs 35 crore. Over 50 per cent of manufacture from Raymond's denim division, is exported. This fiscal, denim export is hoped to earn Rs 60 crore.

Fabric exports, which at 3 million metres last year, fetched Raymond revenues of Rs 80-85 crore, could be down by half a million metres this fiscal due to the global downturn.

Regency Texteis Portuguesa Limitida, the overseas unit now acquired by Raymond, has capacity at present for 400 jackets and 400 trousers per day. The company with factory at Caminha, two shops in Portugal and two more in Spain (through its subsidiary), h ad a profit before interest, depreciation and tax of $5,91,000 on a turnover of $5.2 million in 2000.

The price paid by Raymond includes the cost for buying Regency's brands. The `Regency' brand will be retained, but the acquisition is more to grow the `Raymonds' brand abroad. Portugal, while offering duty-free transit of goods to markets elsewhere in th e European Union has wage levels far lower than that in UK, France, Italy or Germany.

Currently, Raymond supplies fabric to garment converters abroad. The 11-year-old Regency used to buy fabric from Raymond. Post-acquisition, if the unit sources fabric entirely from Raymond, the annual off-take should be around 100,000 metres of premium f abric, Mr Singhania said.

The acquired company is set for a name change to Raymond. On additional investments, Mr Singhania said he would decide after running the acquired company for three months.

Picture: Mr Gautam Hari Singhania, Chairman and Managing Director, Raymond Ltd, and Mr Pradeep Bhandari, President-Corporate, at a press conference in Mumbai on Monday.

Picture by Shashi Ashiwal