The first half of fiscal '16 has 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. Net profits have exactly doubled over the same period last year, though a significant surge in other income and reduction in finance cost have played a big part in buffing up the bottom line.
The period has been a blessing in terms of depressed fuel and power prices, low cotton prices, and the fall in Rupee value in August that fell again in late October. This is clearly reflected in the expansion of the company's margins.
Kohinoor Textile Mills operates in three segments: spinning, weaving, and processing and home textile. The spinning segment, which amounts for over a third of revenues yet somehow the most in net profits, is likely to have performed far better over last year since the imposition of 10 percent RD on Indian yarn imports in October. As for the weaving segment, the company's last quarterly report mentions some equipment installed in the weaving unit last year to be working to its optimum capacity in FY16. In the processing and home textile,
the international market remains inundated with low-price offerings from regional competitors. However, Kohinoor Textile is investing to increase its value-added offerings in an effort to move away from "commodity products" being offered by India and China, as per the latest Director's Report.
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