Mumbai: Textile firm Arvind Ltd will merge group company Arvind Products with itself, a move that is likely to help save as much as Rs 10 crore in costs annually from FY12, a senior official said on Friday.
Shareholders of Arvind Products , in which Arvind holds 54%, will get one share of the latter for every 11 held, it said in a statement.
“Both are textile businesses and we have lot of inter-linkages in terms of supply and raw material. So everytime we supply we end up paying taxes in terms of sales, VAT, excise duty. So, we expect this merger leading to savings in costs,” director Jayesh Shah told Reuters over the telephone.
The company’s consolidated net profit more than tripled in the March quarter to Rs 63 crore on strong volumes and better realisations. Its revenues grew 59% to Rs 120 crore.
For the full year, net profit more than tripled to 1.65 billion rupees as sales grew by nearly a quarter.
Shah expects the firm’s topline to grow at 20% in FY12.
Post-results, shares of Arvind extended gains to more than 5% to a day’s high of Rs 74.7 in a firm Mumbai market. They ended up 3% at Rs 73.15 rupees.
The firm, which has also diversified into real estate, said it was on track for “unlocking value of its land bank.” It is looking to liquidate Rs 800-900 crore worth of land over the next 3 years.
Earlier this month, it formed a joint venture with Tata Housing to develop a township with projected revenue of Rs 200 crore.
The company expects to earn about Rs 200 crore from its real estate business in FY12, Shah said.