Indian polyester yarn makers witnessed a sharp drop in their bottom-line during second quarter ended September 2013, hit by rise in prices of raw materials such as Purified Terephthalic Acid (PTA) and Monoethylene Glycol (MEG), which the companies failed to pass on to the buyers.
JBF Industries Ltd, leader in polyester value chain products, reported a loss of Rs 3.9 crore during Q2 FY14 as against a net profit of Rs 49.4 crore in the corresponding quarter of previous fiscal. The fall in net profit of the company was in line with steep increase in the prices of PTA and MEG which led to surge in the prices of texturized polyester yarn, the benchmark yarn variety.
PTA prices averaged at Rs 72.67 per Kg in Q2 FY14 versus Rs 60.27 per Kg in Q2 FY13. The price touched 52-week high of Rs 77.50 per Kg during the month of September 2013. Similarly, MEG prices averaged Rs 70.07 per Kg in Q2 FY14 versus Rs 57.77 per Kg in Q2 FY13. It touched its 52-week high of Rs 78.30 per Kg in the month of September.
With these raw materials getting costlier, the industry-wide average price of Chips stood at Rs 94 per Kg in Q2 FY’14 versus Rs 80 per Kg in FY13. The Partially Oriented Yarn (POY) & Specialty Yarn prices also increased to Rs 106 per Kg from Rs 93 per Kg during year ago period across the industry. Polyester POY is the first form of yarn made directly from PTA & MEG or by spinning Polyester PET Chips.
Welspun Syntex Ltd, one of the leading exporters of Polyster Texturised Filament Yarn from India, also reported a huge drop in net profit at Rs 0.11 crore in Q2 FY14 as compared to Rs 9.2 crore in Q2 FY13. Net sales of the company increased 17.6 per cent at Rs 241.9 crore versus Rs 205.75 crore in Q2 FY13.
Filatex India Ltd said its net profit dropped to Rs 0.15 crore in Q2 FY14 from Rs 5.06 crore in Q2 FY13. This is despite the increase in company’s total income by 44 per cent at Rs 446.45 crore from Rs 310.20 crore in the corresponding quarter of previous fiscal.