Gujarat-based Sintex Industries has revised its sales and profit forecast to 15 per cent each from 20 per cent for FY16 on account of substantial fall in the commodity prices. The company having annual revenues of Rs 7000-odd crore operates most of its businesses, which involves passing on the rise or fall in input costs.
“Commodity prices have dropped substantially...beyond our imagination. Petro-based commodity prices have declined more than 20 per cent on an average basis in December quarter,” said Amit Patel, group managing director in an analyst conference call today.
commodity prices decline
However Patel also added that he does not expect any further decline in commodity prices at least in March quarter, which is the strongest historically. In nine months ended December 2015, the company’s consolidated revenues and adjusted net profit grew 12 per cent and 15.6 per cent year on year to Rs 5410 crore and Rs 400.7 crore respectively.
Meanwhile, the company’s compact high-end count for cotton yarn spinning project is progressing well and 1,30,000 spindles has been commissioned. The company is confident of achieving full commissioning of 3, 24, 000 spindles, which involved capex of Rs 1870 crore, by March end or early April.
On full capacity utilisation, which will take about nine months, the company expects the project to generate revenues of Rs 800-1000 crore in FY17 at 19 per cent operating margin, which will be higher than its current margin of 17 per cent.
Sintex Industries is involved in the business of building materials (prefab, monolithic construction), custom moulding, storage tanks and textiles.
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