Suryalakshmi hits clouds

Suryalaksmi Cotton Mills, a Hyderabad based company is a vertically-integrated denim player, which not only makes cotton yarn (capacity 26,000 spindles) and denim fabrics (capacity: 40 million metres per annum) but also denim garments (capacity 5,000 pieces per day). It also produces an array of valued-added and fancy polyester and blended yarns (capacity: 61,000 spindles). Backed by 4,600 employees, the company has three manufacturing facilities in Andhra Pradesh and two facilities in Maharashtra.

The company had a pretty rough Q1FY18. Starting with a 9% (YoY) lower topline at Rs.172 crore, the company ended the quarter with a 93% fall in net profit at Rs.50 lakh; its net profit in Q1FY17 was at Rs.7 crore.  Its EBITDA halved to Rs.13.5 crore and margins slumped from 14.3% to 7.8%.

The market is obviously not happy with the performance as the stock price has today hit a new 52-week low at Rs.94 and continues to remain in the red.