28th July 2021, Mumbai:
Denim maker Vishal Fabrics’ revenue for the June quarter rose 338 per cent. Domestic demand and an improvement in exports contributed to the denim manufacturer’s growing sales.
An increase in raw material prices impacted gross margin during the quarter.
However, various cost reduction measures helped sustain Ebitda margins.
Going forward, the company will reduce its debt and achieve a reasonable debt: equity mix which will help strengthen the balance sheet.
Vishal Fabrics is a flagship company of the Chiripal Group. Vishal Fabrics’ capacity utilisation has improved from 55 to 75 per cent.
This has been made possible due to a rise in sales to Indian brands, fabric exports and domestic fabric sales.
Higher capacity utilisation led the company to improve its operating efficiencies resulting in better financial performance.
Higher capacity utilisation has also made the business more competitive on the back of lower per unit cost.
For Vishal Fabrics New Delhi is the key market in India whereas for exports it is Bangladesh.
Higher production helped the company achieve economies of scale in the form of lower manufacturing and overhead costs. The lower overhead cost translates into higher ebitda margins.
The denim fabric manufacturer posted a topline growth of 30 per cent in the first half of fiscal ’20.
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