Sintex unwilling to give separate status to textile unit
12 Oct '06
2 min read
Sintex Industries Limited has postponed division of its growing textile unit for next two years as the division is not sufficiently developed for this step.
Managing Director Amit Patel said the move was delayed as KPMG consultants, who were assigned to assess the separation, opined that company's textile unit would not be successful as a separate entity.
He added that profitability would be enhanced by high margin textiles, which bring 30 percent of company's returns. He said maximum topline growth was expected from electrical accessories and pre-fabricated textiles, with about 27 percent margin for the bottom line.
Sintex is spending Rs1.8 billion on the unit to raise fabric production capacity from the current 21 million metres to 29 million metres by 2009. It will generate garments and home furnishing capacity under the Rs4.1 billion growth plan.
Company is evaluating performance of four US and European firms with Indian undertakings for acquisition.
He said company accrued $50 million convertible debt in January 2006 for the acquisitions and cash savings of Rs4.5 billion. It declared total earnings of Rs920 million and total sales of Rs8.5 billion in the year ended on March 2006.
Company was not prepared for global expansion. Sintex hoped to have 18 to 19 percent total profit growth on 30 percent revenue growth in coming three years.
marketing@alchempro.com
