The facility will be commissioned by December 2019
Welspun India will invest Rs 900 crore this year as part of its plan to set up a flooring textile facility in Telangana. The textile company has already invested Rs 70 crore of the total outlay in the first quarter of the year.
“The capex will pick up in the coming quarters. The facility for flooring solutions is the first of its kind in India,” Chief Financial Officer Altaf Jiwani told Moneycontrol.
The total outlay of the project is Rs 1,100 crore and the facility will be commissioned by December 2019.
“The facility is spread over 27 million square feet. As of now, this product is being imported from countries like China and Turkey,” said Jiwani.
He added that the facility will generate a peak revenue of $150 million a year once it is commissioned.
The company posted 1.6 percent increase in its revenues to Rs 1,577 crore in the quarter ending June 30. “The actual volume growth was over 8 percent, but this was offset by the change in GST drawback rates,” said Jiwani.
Net profit increased by 2.4 percent to Rs 127 crore.
The numbers were also impacted by an increase in cotton prices. Cotton and equivalent yarn make up for 45 percent of the company’s cost.
“Cotton costs have increased substantially, from Rs 42,000 per candy to Rs 48,000 per candy,” said Jiwani.At the same time, with the minimum support price finalised at Rs 43,000 per candy and with the advent of the new season, the prices should reduce.