Indo Rama Synthetics

IDBI Capital, in its report on Indo Rama Synthetics, states that the company's revenues were down 13 per cent y-o-y, at Rs 398.5 crore; profits were down 79 per cent, at Rs 4.6 crore.

There has been a depreciation margin of 550 bps and a sluggish topline and bottomline. After a brief revival in Q2 results, the current quarter was lacklustre.

The fall in volumes was 7.5 per cent, while in value terms, it was 13 per cent. Despite the buoyant demand for polyester in the country, the company has not been able to benefit, as it is in the lower end of the chain. It will see benefits only if (PTA, MEG) raw material prices soften and it is able to ensure sustained volume growth.

Costs of raw material and power have pulled down margins for the company. It expects raw material prices to soften for the last two quarters. However, this seems to take some time and till then, the margins are expected to remain depressed.