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Home Fur­nish­ing gi­ants are pos­i­tive; ex­pect­ing bet­ter busi­ness

In­dian home fur­nish­ing in­dus­try stal­warts are talk­ing about pos­i­tiv­ity and in­creased busi­ness op­por­tu­ni­ties be­cause of many ex­pan­sions in both global and In­dian re­tail sce­nario. Among the com­monly men­tioned de­vel­op­ments are grow­ing re­tail sales in the US, strong Ger­man econ­omy and good growth in do­mes­tic mar­ket, all of which are adding to the pos­i­tiv­ity. Most of the mar­ket lead­ers are go­ing in for ca­pac­ity ex­pan­sions and mak­ing in­vest­ments on mar­ket­ing front… How­ever, a note of cau­tion re­mains as even though the to­tal in­come has in­creased, many pub­lic lim­ited com­pa­nies have reg­is­tered a de­crease in profit which clearly shows pres­sure on mar­gins. Yet, things have moved dur­ing Q1 FY ’19, and most of the com­pa­nies have shown over­all growth in their per­for­mance. Ap­parel On­line takes a closer look.

Hi­mats­ingka Seide: Growth through global ac­qui­si­tions

Hi­mats­ingka Seide (part of the Hi­mats­ingka Group) had to­tal in­come of Rs. 601.38 crore in Q1 FY ’19 which is 16 per cent more than the Rs.

515.16 crore in Q1 of FY ’18. But the con­sol­i­dated profit for Q1 FY ’19 was down by 12 per cent to Rs. 44.57 crore com­pared to Rs. 50.63 crore in Q1 of FY ’18. Dur­ing the quar­ter ended 30 June 2018, the com­pany through its wholly-owned step down sub­sidiary Hi­mats­ingka Amer­ica Inc., US, has ac­quired the home port­fo­lio of Global Brands Group Hold­ing Lim­ited. The ac­quired port­fo­lio in­cludes ex­clu­sive li­cense rights for Tommy Hil­figer Home brand, the Cop­per Fit brand, and other brands.

The com­pany is geared up for fur­ther busi­ness and has a pos­i­tive out­look as the in­te­gra­tion of the re­cent ac­qui­si­tion of brand li­censes is pro­gress­ing well. It is ex­pected to com­plete in­te­gra­tion by Q4 FY ’19. The con­struc­tion of the Green­field Terry Towel fa­cil­ity is pro­gress­ing as per sched­ule and the plant is ex­pected to come on stream dur­ing H1 of FY ’20. Sim­i­larly, it also claims that the ramp-up at the new spin­ning fa­cil­ity, which com­menced com­mer­cial pro­duc­tion dur­ing Q4 FY ’18, is pro­gress­ing sat­is­fac­to­rily. “Ramp up at the spin­ning fa­cil­ity is pro­gress­ing as per ex­pec­ta­tion and we should exit Q2 FY ’19 with the op­ti­mal level out­put from the fa­cil­ity,” says the com­pany.

Tri­dent Group: Bed linen, a growth area

Tri­dent Group’s tex­tile seg­ment (Yarn, Bath & Bed Linen) rev­enue stood at Rs. 916 crore in Q1 of FY ’19 com­pared to Rs. 967 crore in the last fis­cal year reg­is­ter­ing a de-growth of 5 per cent. But its bed linen sales grew by 14 per cent quar­ter-on­quar­ter (QoQ) base. The com­pany board has ap­proved to im­ple­ment Co-gen Steam (2 x 150 TPH) and Power Plant (2 x 30 MW) fa­cil­ity in

“Af­ter fac­ing mul­ti­ple chal­lenges over the last 18 months, we are slowly wit­ness­ing an uptick in de­mand. With a pos­i­tive out­look on global growth and In­dia ad­van­tage, we re­main op­ti­mistic. We con­tinue to work to­wards strength­en­ing our po­si­tion in key mar­kets glob­ally, backed by in­no­va­tive de­signs and prod­ucts, fo­cused cus­tomer-cen­tric ap­proach and a port­fo­lio of as­pi­ra­tional and func­tional brands.”

– Anil Ku­mar Jain, Ex­ec­u­tive Chair­man, Indo Count In­dus­tries

Budni (Mad­hya Pradesh) which shall be ex­e­cuted in a phased man­ner and is ex­pected to be com­pleted by FY ’21. It will help the com­pany to re­duce de­pen­dence on ex­ter­nal power and will also en­sure un­in­ter­rupted 24x7 sup­ply of reg­u­lated power & steam for its yarn, bath linen, and bed linen units. It is worth men­tion­ing here that forex loss for the cur­rent quar­ter in­cludes marked to mar­ket loss of Rs. 3,934.2 lakh on for­eign cur­rency for­ward con­tracts which is fur­ther ad­justed from re­sults of tex­tiles’ seg­ment.

GHCL: Banks on sus­tain­abil­ity as way for­ward

GHCL’s home tex­tiles busi­ness rev­enue de­clined by 15 per cent to Rs. 265 crore in first quar­ter of FY ’19 as com­pared to Rs. 311 crore in the cor­re­spond­ing quar­ter in FY ’18 pri­mar­ily due to head­winds. How­ever, se­quen­tially the rev­enue has grown by 21 per cent and earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­za­tion

“We are con­fi­dent of achiev­ing our vi­sion of +20 per cent profit growth on a long-term hori­zon cre­at­ing value for our stake­hold­ers. This quar­ter, we have been able to achieve a sat­is­fac­tory per­for­mance which is in line with our ex­pec­ta­tions.”

– RS Jalan, MD, GHCL

(EBITDA) have grown by 43 per cent to Rs. 18 crore. The com­pany says that net profit for the cur­rent quar­ter was Rs. 62 crore as com­pared to

Rs. 76 crore of Q1 FY ’18, (ex­clud­ing one-time in­come tax credit of Rs. 82 crore) pri­mar­ily due to the im­pact of head­winds in home tex­tiles, which has now started show­ing signs of improve­ment when com­pared to Q4 FY ’18. The com­pany claims that the out­look for FY ’19 is pos­i­tive and it is on track with ex­pan­sion plans which are likely to be com­pleted within the stip­u­lated time and cost. The com­pany has also come up with a new brand, ‘Cirku­lar­ity’. Fol­low­ing the three Rs – Re­duce, Re­use and Re­cy­cle – the brand is also fo­cused on sus­tain­abil­ity.

Indo Count In­dus­tries Ltd.: Own brands for fash­ion bed­ding seg­ment

To­tal rev­enue of Indo Count In­dus­tries stood at Rs. 457 crore for Q1 FY ’19 as against Rs. 432 crore in Q1 FY ’18 while the sales vol­ume stood at 14.4 mil­lion me­tres in Q1 FY ’19 as against 11.8 mil­lion me­tres in Q1 FY ’18, though the profit af­ter tax for Q1 FY ’19 was Rs. 29 crore as against Rs. 32 crore in Q1 FY ’18. Ded­i­cated to bed­ding mainly, the com­pany claims that it is the sec­ond largest man­u­fac­turer and ex­porter of bed linen from In­dia; and amongst the top three bed sheet sup­pli­ers in the US; and also the 11th largest global home tex­tiles sup­plier to the US. The com­pany has re­cently launched three new brands, namely, Heir­looms of In­dia, Bou­tique Liv­ing Coastal and AT­LAS in the Fash­ion Bed­ding seg­ment in the US. It has also launched a new li­censed brand, Mor­ris & Co. in the US. It has no­ticed that US re­tail sales are wit­ness­ing an uptick trend.

Hav­ing a good reach in the do­mes­tic mar­ket, the com­pany claims that its brand Bou­tique Liv­ing is hav­ing pos­i­tive ac­cep­tance. The In­dian mar­ket is grow­ing at 8 per cent CAGR and is go­ing for­ward; so, the com­pany an­tic­i­pates con­tin­u­ous growth in this seg­ment. Fur­ther, the com­pany is fo­cus­ing on the mod­erni­sa­tion of spin­ning and on tap­ping newer ge­ogra­phies.

“We are start­ing the new fis­cal with high op­ti­mism. The com­pany is well po­si­tioned for fu­ture growth and is ca­pa­ble to de­liver im­proved per­for­mance in the cur­rent fi­nan­cial year. Green shoots of re­cov­ery are vis­i­ble

– US, Europe & other key mar­kets have shown con­sid­er­able strength in re­cent quar­ters.” – Ra­jin­der Gupta, Chair­man, Tri­dent Group

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