Led by Home Textiles, GHCL Limited puts up a Strong Financial Performance
31 Oct 2007

To leverage Indian Unit for Overseas and Domestic Retail Operations

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New Delhi, -- Q2 FY2008 revenues up 19% at Rs. 230 Crores; H1FY2008 revenues at Rs. 466 Crores
-- Q2FY2008 PAT at Rs. 25.4 Crores, H1 FY2008 PAT at Rs. 57 Crores
Home Textiles:
-- Home Textiles leads the Revenue Mix with 101% growth; Accounts for 41% of the total revenue
-- The company set to launch its exclusive range of Home Textiles Retail chain stores in the country in first quarter of 2008. To improve margins for the company going forward
-- Company's Domestic Home Textiles division in India launches GRACE line of Bedding Products for the domestic market.
-- Spinning Unit expansion from 1,15,000 spindles to 1,40,000 spindles progressing as scheduled.
Soda Ash
-- GHCL has increased the selling price of Soda Ash on an average of Rs.1300 PMT w.e.f. October 16, 2007
-- Company's Indian Soda Ash capacity expansion from 6,00,000 MT to 8,50,000 MT which was commissioned during March 2007 is in the process of stabilization
GHCL Limited, is a $700 million dollar multi product transnational company has posted a strong financial performance for Quarter Ended SEPTEMBER 2007 on the back of steadily strengthening home textiles business.
The company said-
"GHCL expects to substantially improve its margins for the home textiles business with the launch of its exclusive range of Home Textiles Retail chain stores in the country in first quarter of 2008 along with the already launched GRACE line of Bedding Products for the domestic market.
The company's Global Home Textiles Revenues of over $ 600 million dollars to a great extent is been insulated from the Rupee Dollar variation on the back of bulk of the sourcing being done from other global sourcing destinations such as Cambodia, China, Pakistan, Turkey and Mexico. The company's India unit only accounts for about 10% of the Global sourcing.
Our Home Textiles business set to acquire pace from now on as during the present period, it has already shown a healthy pace of growth of over 100% and accounting for 41% of the total revenue of the company."
The Net Sales/ Income from operations for the company increased by 19% to Rs. 230 Crores from Rs. 194 Crores reported in the corresponding quarter ended September 2006. For the half year ended it increased by 29% to Rs. 466 Crores. The EBITDA in the present quarter increased 14% to Rs. 56 Crores from Rs. 50 Crores while it increased by 8% to Rs. 124 Crores in the half year ended September 2007
The Profit After Tax has increased by 2.6% in the present quarter to Rs. 25.36 Crores from Rs. 24.71 Crores reported in the quarter ended SEPTEMBER 2006. For the half year period it stood at Rs. 57 Crores showing an increase of 2%. EPS for the quarter is at Rs. 2.55
The Home Textiles division revenue during the quarter September 2007 accounts for 41% of the total revenue total revenue with a growth of 101% to Rs. 99 Crores in September 2007 quarter from Rs. 49 Crores as compared to September 2006.
Soda Ash division in comparison has an interim growth of (6) % to Rs. 135 Crores in September 2007 quarter from Rs. 144 Crores as compared to September 2006, due to unprecedented rainfall resulting in the flooding of the plant.
Reflecting on the performance, Mr. Sanjay Dalmia, Chairman, GHCL Limited, said:
"The Home textiles have started playing a key role in the growth of the company clearly reflected in the numbers for the period under consideration.
With the growing momentum in global retail arena, we are fast approaching the time wherein we would be able to fully leverage our business model after successfully integrating Indian and foreign operations in the home textiles businesses.
Currently our Vapi Unit in India is only being leveraged at about 10% of our total global Home Textiles operations because of the Rupee Dollar situation. With the launching of our Retail plans in India and with an already present Domestic Brand in the Bedding segment, we will have complete flexibility and will be well positioned to sell in both our domestic markets and our overseas operations and take advantage of such opportunity in the coming quarters.
On the soda ash front, the firming up of the prices is expected to bring in a strong performance in the coming quarters."
In the overseas home textiles arena, GHCL's Rosebys is currently undergoing its Re-Branding Process in the UK market, to provide it a new High Street Look. It has also opened 5 new stores and is in the process of enhancing its value proposition in the High end category of product mix. It has started its KPO operations in India as a cost reduction initiative, and is in the process of implementing SAP for higher efficiencies.
Rosebys has also launched its e-commerce portal and is in the process of promoting the same in the UK. GHCL has consolidated the operations of Dan River Group (BEST, BAKER & DAN RIVER) and has improved order book, led by strong Marketing, Outsourcing and HR initiatives.
The company has also completed cost control initiatives that have lead to a reduction in overhead costs. GHCL has developed over 50 vendor relationships for the outsourcing from India, China, Pakistan, Mexico, Cambodia and Turkey and increased its client base to over 900.
In its overseas Soda Ash business GHCL has a capital Investment programs covering capacity enhancement, efficiency improvement for its Romanian Soda Ash Operations. The plan is progressing as per the scheduled.
Romanian Plant at present is operating at 90% efficiency with GHCL Romania gaining a preferred vendor status in Romania. The company has added 10 Marquee clients in the dense soda ash (glass area) namely SAINT GOBAIN, OWENS, GUARDIAN, STRIOM, P&G, signaling strong growth in automobiles, construction and FMCG.

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