India’s leading textile giant KPR Mill has reported yet another solid operational performance in Q1 FY22.
In this period, the overall revenue of the company grew by 67 per cent Y-o-Y (down 19 per cent Q-o-Q) to Rs. 903.7 crore, while the textile segment (87 per cent of total revenue of the company) shot up by 85 per cent Y-o-Y.
Notably, the company is also in sugar segment.
The gross margins of the company improved 458 bps Q-o-Q to 46.9 per cent and continue to remain higher than its average level of 42-43 per cent owing to enhanced yarn spreads.
Key triggers for future price performance include its major capex projects in the pipeline worth Rs. 250 crore for apparel manufacturing.
Importantly, robust opportunities in the US market give strong visibility for sustained growth in exports (currently Europe is the key market for garment exports).
The management indicated that it has sufficient cotton inventory till October 2021 and average cost of inventory is lower than the current prevailing market price (Rs. 49,000 per candy vs. Rs. 56,000 per candy).
The garment order book, which was around Rs. 575 crore in Q4 FY21, is now close to Rs. 700 crore.
On the back of a healthy order book and sustained demand for casualwear product exports (where KPR’s expertise lies), garmenting division continued to operate at optimum utilisation levels.
Volumes came in at 28 million pieces (up 81 per cent Y-o-Y, flattish Q-o-Q) with average realisation of Rs. 136 per piece.