Indo Rama plunges into red

Depreciation charge was sharply higher at Rs 92.28 crore against Rs 57.15 crore in 1996-97. The equity capital has remained unchanged at Rs 155.72 crore.

Lohia said at a press conference on Wednesday that mismatch in domestic demand and supply of polyester products leading to lower than optimal capacity utilisation by the company and sharp decline in products prices both in theglobal and domestic market as a fallout of Asian currency crisis affected the margins. He also blamed inventory losses due to steady decline in the raw material prices for the poor margins.

The company’s financial performance in 1997-98 is sharply lower than the projections made at the time of a rights issue in February 1996. The company had then projected a turnover of Rs 1973 crore with a net profit of Rs 235.78 crore for 1997-98.

Lohia, however, remains bullish on the future of polyester industry in the country. "The fundamentals of the polyester industry continue to be strong with the demand going up from 0.78 million tpa in 1996-97 to 1.04 million tpa in 1997-98. Even though the south east Asian currency crisis has affected the bottomline, we have continued to hold on to our market share," he said. Meanwhile, Indo Rama has finalised a $ 15 million external commercial borrowing plan (ECB) a few days ago.