Alok Industries
Interest burden continues to be remain the bane of this textile firm. In current quarter ended 30th June 2015, the company’s interest outgo was at Rs.575 crore, up 7% (YoY) while it stood at a gargantuan Rs.3251 crore for FY15. This and the lower topline continues to restrict the company’s bottomline. Net sales for the quarter was down 10% (YoY) at Rs.3359 crore. Raw material cost showed a huge 57% jump; it reduced all other costs and brought down operating costs by 9%. Yet, that was not enough to bring up the EBITDA, it was down 15% and margins fell from 21.98% to 20.57%. But after the interest outgo, net profit was pretty small at Rs.10 crore, down 77%..
The company is sitting on debt of around Rs.20,000 crore and it plans to repay most of it by 2017. The textile major has approached banks for debt restructuring. At the same time, it is taking several steps to increase exports. With higher dollar earnings, the company is also planning to swap its local loans with dollar loans, thereby cutting the interest cost by half and reducing the annual outgo by almost Rs. 600 crore. Promoters stake is at 3781% of which 99.76% is pledged.