Nakoda Textiles Q1 net profit up by 63% yoy

Nakoda Textile Industries Ltd (NTIL) posted a robust 61% growth in top line compared to the corresponding quarter last year to touch 1907.4 mn for the first quarter ended March 08. The company抯 net profit margin grew 63% over the corresponding quarter last year to Rs33.19mn for the first quarter ended March 08. 

Nakoda Textile Industries, one of India抯 largest players in the fully drawn yarn segment, plans to invest Rs3250mn for enhancing their capacity in the coming year.  Babubhai Jain, CMD, Nakoda Textiles Industries ltd made this announcement today in Mumbai. He informed that a continuous polymerization plant of 1 lakh MTPA that would be operational by mid 2009 would facilitate the complete backward integration for the company.

Also envisaged is the addition of POY spinning capacity of 70,000 MTPA. The entire expansion is likely to be completed by mid 2009 taking the company抯 production capacity to 1,00, 000 MTPA of POY. Commenting on the developments, Jain said 揟his project will be a step towards de-risking the business model of our company. On implementation, it will eliminate our dependence on outsourced polyester chips and offer better value addition due to continuous polymerization.

We intend to fund the project using a mix of equity, internal accruals and debt. It has been our endeavor to ensure enhancement in shareholder value. As a step towards this, we are undertaking this capital expenditure?

Continuous polymerization is a process in which Purified Terephthalic acid (PTA) or Dimethyl Terphthalate (DMT) reacts with Monoethylene Glycol (MEG) and is then subjected to continuous polymerization and spinning to produce partially oriented yarn (POY). This is an alternative process to manufacture POY directly from PTA / DMT and MEG without going the chip route ?thus eliminating one step in the manufacturing of POY. This results in better realization and improvement in turnaround time.