Rajapalayam Mills charts ₹400 cr capacity expansion on strong biz outlook

Rajapalayam Mills Ltd., part of the Ramco Group, is investing Rs 400 crore to expand the capacity of its fabric division in view of the favorable order outlook.

A leading manufacturer of cotton yarn and fabrics, has been receiving numerous inquiries from leading brands across the world for the supply of processing fabrics. The special value added fabric produced from its jacquard looms has received a good response in the export markets.

“As the demand for our quality fabrics is very encouraging, the company is expanding its fabric division by adding 166 looms and setting up a new unit at Rajapalayam with a capacity to process 50,000 meters of fabric per day. In addition, it will install 110 KVA / 11 KVA substations inside its Rajapalayam campus to strengthen its power infrastructure,” the company said in its annual report for FY 2012.

With an outlay of ₹400 crore, the capital expenditure proposals will be funded from internal accrual/equity instruments and term loans from banks.

new textile unit

Meanwhile, the fabric units commissioned during FY2 are running successfully with a capacity of 146 looms. In FY22, it has produced 79 lakh meters of cloth as against 39 lakh metres). It sold 91 lakh meters of cloth as against 41 lakh meters in FY 2011, registering a growth of 122 per cent. The total revenue generated by the fabric unit for FY22 was ₹122 crore (₹39 crore in FY21), and exports were ₹31 crore (₹11.5 crore in FY21).

financial performance

The company’s FY22 l revenue was ₹705 crore, which was higher than ₹429 crore in FY21. Yarn sales increased to 550 crores in FY 2012 as compared to 363 crores in FY 2011.

For the first quarter of this fiscal, its total revenue stood at ₹204 crore, up from ₹134 crore in the year-ago quarter, while profit after tax increased to ₹18 crore as compared to ₹5 crore.

“A strong trend is being observed in the retailing of textile products across the globe. Global demand for cotton yarn, fabrics and fabrics is increasing due to the impact of stagnant demand and increased consumer spending. India is becoming a strong alternative sourcing base for China for textile products. The recent trade agreements between India and other countries like UAE and Australia will further boost the demand for Indian textile products in the export market in the coming years.

The company has reshaped itself to a better position by strengthening its product lines with more value-added customized yarn counts like Mercerized Yarn, Melange Yarn, Core Yarn etc. to take full advantage of the current trend of the market.

Published on

01 August 2022

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