Lagnam Spintex Announces Its Expansion Plan Of Rs 218 Crore To Double Its Capacity
Lagnam Spintex, the leading manufacturer of high-quality cotton yarns in India, is planning a capital expenditure of about Rs 218 crore towards the expansion project of 41,472 spindles of 100 percent cotton compact yarn.
The company expects an additional top line growth of approximately Rs 300 crores annually, after the installation of the additional capacity in next two fiscal years starting from 1st April 2024.
After the successful completion of the proposed project at the existing facility, the production capacity of the company will rise from 35 tons per day to 70 tons per day, the capex will almost double the company's product capacity and add a new product of ‘Compact Yarn’ which is seeing lot of demand in Domestic as well as Export market.
Anand Mangal, Promoter and Managing Director of Lagnam Spintex said, "The global demand for textile products is rising and will sustain for long term. The strategy of China plus One is playing out well and the domestic and export demand after the pandemic has been robust."
"We are seeing a lot of demand from our existing and new customers therefore it is the right time for expansion to strengthen the company's market position by doubling our production from the current levels," he added.
The new product mix will help in adding a new customer base and bring competitive cost advantage.
The proposed 218 crore capex will be funded in 3:1 ratio by debt and internal accruals and the company will raise loans of about Rs 164 crore (75 percent), with a funding of Rs 54 crore (25 percent) from internal sources.
The capex will not only boost the company's economic growth but will also increase the employee headcount by about 400 employees at multiple levels, generating ample employment opportunities.
Lagnam Spintex reported a 107 per cent rise in the net profit to Rs 9.4 crore for the quarter ended December 31, 2021 as against a net profit of Rs 4.54 crore in the same period previous fiscal.
Its top line grew 45 per cent to Rs 90.95 crore in the Q3 FY22 from Rs 62.7 crore in the year ago period. EBITDA stood at Rs 17.87 crore in December 2021 up 76 per cent from Rs 10.16 crore in December 2020.