Fiscal 16 have been kind to Kohinoor Textile Mills Limited - 5 percent growth in top line year-on-year and costs kept contained, yielding a double-digit surge in gross profit. The firm's bottom line has shot up by 75 percent over the same period last year. A significant increase in other income and reduction in finance cost played a big part in buffing up the bottom line.
Kohinoor Textile Mills operates in three segments: spinning, weaving, and processing and home textile. The spinning segment is likely to have performed far better over last year since the imposition of 10 percent RD on Indian yarn imports in October. The company likely would have shifted focus from exporting yarn to the domestic market.
In processing and home textile, the international market remains inundated with low-price offerings from regional competitors. However, Kohinoor Textile has been investing to increase its value-added offerings.
One growth driver is likely to have been the more favourable exchange rate seen in the last quarter. This would have greatly benefited Kohinoor Textile, which is an export-oriented company. Moreover, energy tariffs were lower and energy supply has improved over last year.
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