Tuesday, November 5, 2024

R&B Denims Ltd. Plans Major Expansion & Modernization

BSE listed company R & B Denims Ltd. (BSE: 538119) one of the most influential textile houses with largest vertically integrated textile manufacturing facilities of over 30 million meters capacity of denim, has planned major expansion in March’22 with new Air jet Looms – Dobby Machines being installed. It has started to manufacture the prominent luxury level of Denim Fabric with the Width of 85 Inches from Dec’22. The Company has invested approx.20 Cr in this technology with the expectation of generating very good Margins from what it is generating today .At present Company’s clients include major brands like Arvind, Killer, Lifestyle, Reliance Retail, etc. and with this new technology the company will achieve an edge over the competition as it is not available with many Denim Manufacturers that will lead to an added advantage for serving the needs of the domestic as well as the international Market.

Earlier, the company delivered steady performance in Q2 FY 23. Revenues from continuing operations stood at ₹14711.5Lakhs, EBITDA at ₹2337.32 Lakhs. Profit after Tax from continuing business was ₹ 1240.60 Lakhs. Despite of the decrease in revenue from Q1 we maintained our profits by focusing on cost reduction, flexible working capital management, and improving productivity and efficiencies.

Amidst a challenging environment, R & B Denim Ltd. continues to grow, backed by a robust business model and its strategic ability to navigate through troubled times. Overall Denim Market is impacted on both the Export and Domestic fronts. The Denim products are attracting more and more people irrespective of age and gender it is expected that the denim industry will grow at a very fast pace in near future.

To retain competitive advantage and consistently deliver value to stakeholders, the company continues to focus on investments for Research and Development, technological enhancement and quality improvement through its state of art, ultra-modern machineries, fully equipped R& D Laboratory, to sustain profit margins and increase operational efficiency.The company is hopeful for increase in revenue and overall profitability in Q4 with
the new machine installations.

In FY 22-23 till Q2, company has Produced 74 Lakhs Meters of Denim Fabric that is equivalent to 46Lakhs pair of Jeans.

In FY 22-23, company participated in Denim Show at Delhi, which gave promising results in getting new customer base and helped to increase demand of Productsin domestic Market.

Its Previous Participation at exhibitions outside India led to increase Company’s exports in FY 22by 225% as compared to FY 21. Even with the diminishing market, till Sep’22 it has been able to export 40% of the total export sales that we achieved in FY 21-22. As on Sept’22 exports represents 21% of its total sales which company further expects to Increase as the market heads towards Normalization.

On export side, denim is largely impacted by inventory build-up in US, once inventory starts to clear up, we think they should start to normalize perhaps later part of quarter 4. On domestic front, Volatility of cotton prices and inability to increase the product’s price with the rise in Input cost has resulted in volume shrinkage. As Cotton has started to normalize now, company expects that it should correct itself by January end and revenue would follow
how cotton normalizes.

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