The vertically integrated Indian textiles producer Vardhman Textiles Ltd. reported a steep 48.4 per cent fall in net profit at Rs. 91.70 for the second quarter of fiscal 2014-15 as against Rs. 177.81 crore in the corresponding quarter of 2013-14.
Vardhman said pursuant to a new act, it had to recalculate the remaining useful life of its fixed assets, which drove depreciation and amortisation costs higher by Rs. 33.15 crore, thereby, impacting profits.
Helped by capacity increase in yarns and fabrics, net sales at Rs. 1487.54 crore in the reporting quarter expanded 16.26 per cent from Rs. 1279.51 crore in the prior year fiscal quarter at the North India based textile group.
However, high cotton prices and low yarn prices drove EBITDA margins down to 17.59 per cent in the quarter under review at the company from 27.08 per cent in the second quarter of 2013-14.
