Mumbai: Textiles firm Mandhana Industries does not expect a significant impact on revenues in the current fiscal year as a number of new clients it has added is seen offsetting the impact of a dip in demand from overseas customers, a top official said.
The company, whose clients include Tommy Hilfiger and French Connection, plans to post revenues of Rs 1,100 crore in the current fiscal year from Rs 840 crore a year ago.
Manish Mandhana, MD, Mandhana Industries. File photo.
“There is some softening in demand from overseas clients due to the current global scenario. While some have slowed down, we have been able to bridge the gap by adding new customers,” Managing director Manish Mandhana told Reuters in an interview on Monday.
It has a revenue target of Rs 1,400 crore for the next fiscal year.
“We are confident of demand remaining robust in India and have added fresh capacities. We are confident of selling most of the capacities that we are adding,” Mandhana said.
In May 2010, Mandhana Industries had raised Rs 107 crore through an IPO to increase manufacturing capacity and expand yarn dyeing and weaving units.
The company has a capacity of 3.6 million pieces of textiles, which will rise to 8 million pieces while its weaving capacity will nearly double to 36 million metres.
Mandhana also expects its profits, which were impacted last year due to rising input costs, to rise 35% on the back of softening cotton prices this fiscal year ending March.
Cotton prices, which touched all time high of Rs 61,700 per 356 kg in March on global cues, are now trading at Rs 39,600 on improved supply in both domestic and overseas markets.
Softening input prices are also expected to boost the firm’s operating margins.
“On the apparel front we are getting an operating margin of approximately 27% and on the garment front we have around 19%, so blended is expected to be around 22% for FY12,” Mandhana said.
It achieved operating margins of 18% last year.
The company will make its retail debut in India and France in January 2012 with its Being Human chain of stores and subsequently spread to other European nations such as Switzerland, Germany, Spain and the United Kingdom.
“We are going international with our retail plans. We are planning to enter France by January 2012 and plan to make it available at multi-brand outlets there.”
It is also planning to enter the Middle East by March-April 2012, he said, adding the firm was expecting revenues of Rs 100 crore over 2 years from its retail operations after investing Rs 600 million in setting up 20 stores across the country in 2012.
Mandhana Industries has fixed a total capital expenditure of Rs 120 crore for the current fiscal year which includes its retail and new capacity investments.
Shares of the firm, which have fallen 12% since the start of the year compared to a 17% fall in the main index in the same period, ended up 1.67% at Rs 228.65 in a Mumbai market that ended lower.