KPR Mills reports steady operating performance in challenging business scenarioKPRMILL - 860 Change: -7.35 (-0.85 %)
News: KPR Mills revenue for the Q1FY23 grew 9% sequentially to Rs 1584.2. Inspite of cotton prices increasing significantly during the quarter the company reported flattish gross margins on QoQ basis at 41%. Employee expenses grew by 20% QoQ to Rs 133.6 crore mainly on account of newly commissioned garmenting and ethanol plant with EBITDA margins remaining flattish QoQ to 23.2% and absolute EBITDA increasing 10% QoQ to Rs 368.1 crore. Consequently, PAT grew by 3% QoQ to Rs 226.7 crore (up 35% YoY).
Views: Despite significant increase in raw material prices (cotton), KPR reported steady operational performance. Healthy yarn realisations and strong order book for the garmenting division continued to drive topline growth. Garmenting division which had recorded an all-time high production of 124 million pieces in FY22 (vs. 95 million pieces in FY21) continued its growth trend. For Q1FY23, KPR reported 26% increase in garment production to 33.47 million pieces. We expect the garmenting division to drive revenue growth for the company along with EBITDA margins being maintained between 22-23% over next two years.