Why Did Ramaraju Surgical Cotton Mills Consolidated Net Profit Rise In The First Quarter Of 2021?

Why did Ramaraju Surgical Cotton Mills consolidated net profit rise in the first quarter of 2021?

About Ramaraju Surgical Cotton Mills

  • Ramaraju Surgical Cotton Mills, Ltd is a subsidiary of the Ramco Group. The company generates about USD 1.0 billion in yearly sales through manufacturing cotton and specialty yarns, as well as cement, roofing, and construction materials. The company also provides cloud-based enterprise software solutions. They Are Trending Investment Sources In 2019 And Also More & More People Are Choosing Unlisted Shares As Their Secondary Income Sources By Choosing The Company With Their Interpretations.
  • The Ramaraju Surgical Cotton Mills was established in Rajapalayam, Tamil Nadu, in 1939 to take advantage of the local farmers’ cotton supply. Together with Rajapalayam Mills Ltd., which was founded in 1935, the firm was crucial in changing the region from an agrarian to an industrial civilization.
  • In Rajapalayam, Tamil Nadu, the Ramaraju Surgical Cotton Mills opened in 1939 to take use of the local farmers’ cotton supplies. The company was instrumental in transforming the region from an agrarian to an industrial civilisation, together with Rajapalayam Mills Ltd., which was formed in 1935.
  • They’ve expanded into spinning and weaving throughout the years, creating some of the best cotton yarn in the world and luxury textiles for shirting, bed linens, and Jacquard cloth. Each month, they create roughly 400 tons of superfine count ring-spun yarn and around 400 tons of open-end yarn. With the aid of a 2,200-strong team, it now provides over 200 distinct goods.
  • The Ramaraju Surgical Cotton Mills Ltd. Share were formerly listed on the Chennai Stock Exchange, but due to the closure of the regional exchange in 2015, the company was moved to the NSE’s Dissemination Board. In October of 2016, the company applied for re-listing on the Mumbai Stock Exchange, where approval is still pending.

Factories:

A) Surgical Division

Under the brand name SURGICOM, they manufacture eye pads, absorbent cotton, roller bandages, and other surgical supplies. The Surgical Sector Manufacturing Contributing 80% Of The Company’s Turnover Indicates That This Is The Main Sector Generating The Majority Of Annual Revenues. Ramaraju Surgical Is The South’s Largest Medical Surgery Grade Absorbent With A Capacity Of Over 125 Tons.

  1. Rajapalayam
  2. Perumalpatti

B) Spinning Division

Under the brand name “SUDARSANAM SPINNING MILLS,” they manufacture both run-spun and open-ended yarns. This manufacturing sector accounts for around 12% of the company’s total revenue.

Sudarsanam Spinning Mills

  1. Rajapalayam
  2. Silvassa
  3. Subramaniapuram
  4. Tirumalagiri Village, AP.

C) Fabric Division

Under the brand name “SUDARSANAM FABRIC,” they manufacture bed linens, shirts, and jacquard fabric. This sector accounts for around 5% of the company’s total revenue.

  1. Sudarsanam Fabrics
  2. Perumalpatti

Unlisted Zone Financials Analysis for FY 19-20:

  • Ramaraju had a fantastic year in fiscal year 2019-20. The income has increased by 23 percent, from 255 crores to 316 crores.
  • EBITDA margins have also risen by 500 basis points, which is a significant improvement. 
  • Ramaraju made a profit of 19 crores in FY19-20, compared to a loss the previous year.
  • Although the P&L has been strong, the financial sheet is deteriorating. This year, the current ratio has dropped even lower, from 0.73 to 0.70. The present ratio of less than one is already a warning indication. This indicates that the company’s liquidity is weak.
  • The company’s D/E ratio is 1.31. Anything greater than one is in a perilous area. At the conclusion of FY19-20, total borrowing was 267 crores against a net worth of 236 crores. 
  • Trade receivable days have increased from 43 to 78 days, demonstrating Ramaraju’s struggle to recover debts from debtors on schedule.

Ramaraju Surgical Cotton Mills’ Uprising Profit in 2021

Ramaraju Surgical Cotton Mills’ net profit increased by 781.82% to Rs 34.92 crore in the quarter ended March 2021, compared to Rs 3.96 crore in the preceding quarter ending March 2020. Sales increased by 43.88 percent to Rs 98.44 crore in the quarter ending March 2021, compared to Rs 68.42 crore the previous quarter.

In the year ended March 2021, net profit increased by 112.78 percent to Rs 42.30 crore, compared to Rs 19.88 crore in the prior year ended March 2020. Sales fell 3.47 percent to Rs 282.92 crore in the fiscal year ending March 2021, compared to Rs 293.08 crore the previous year.

ParticularsQuarter EndedYear EndedMar. 2021Mar. 2020% Var.Mar. 2021Mar. 2020% Var.Sales98.4468.42 44 282.92293.08 -3 OPM %14.2111.46 14.7911.01 – PBDT39.381.35 2817 51.2624.53 109 PBT34.49-3.02 LP 33.737.96 324 NP34.923.96 782 42.3019.88 113

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