The company reported a disappointing operating performance in March quarter Q4 FY 22 due to higher raw material cost, but the shares of the company fell 20 per cent to Rs 414 on the BSE in Tuesday s trade.
The stock of the garments manufacturer has corrected 29 per cent from its 52 week high of Rs 585 touched on May 4, 2022 with today's fall.
It was trading 17 per cent lower at Rs 427 at 11:10 am, compared to a 0.17 per cent decline in the S&P BSE Sensex. 3.5 million equity shares changed hands on the NSE and BSE, and the trading volumes on the counter went up four-fold.
The company's consolidated profit after tax PAT fell 25 per cent year on year YoY at Rs 49.3 crore, despite flat revenues of Rs 455.5 crore over the previous year. Earnings before interest, taxes, depreciation and amortization EBITDA went down 18 per cent YoY at Rs 74.2 crores, while margins fell to 16.3 per cent from 20.0 per cent in Q 4 FY 21.
The industry faced headwinds in the form of a COVID wave early in the quarter, coupled with rising raw materials prices, in Q 4 FY22. Advertising promotion expenses were higher for the company. The management said that a number of factors led to pressure on margins.
A decline in EBITDA margins has been caused by flattish revenue growth with a decline in gross profit margin and with expenses reverting back to normal. The gross margin is dwindling due to increased raw material cotton prices, according to ICICI Securities.
The ability of the company to take price hikes to improve its gross margin profile is something that is important to the company's ability to improve its gross margin profile. The brokerage said that progress on improving the share of premium products, which has remained stagnant over the last few years, would be critical in improving the margin profile of the company.
CEO of the chief executive officer of the company, Dinesh Kumar Lodha, has resigned on account of personal reasons. The CEO position is currently being filled with a suitable candidate, and the company is looking for a suitable candidate. The company said that Lodha will be an active part in the process of selecting the new CEO.
CFO - Ramamesh Agarwal - who is also a part of the promoter family has resigned. He left the CFO position to free up his bandwidth from day to day activities to use his rich experience in overall growth and transformation of the company. Agarwal will continue to lead the company as a whole time director. It said something.