Reliance Spinning Mills Profit Falls 16.14%

Reliance Spinning Mills Limited reported a net profit of Rs. 39.90 crore in the fourth quarter of fiscal year 2082/83, down 16.14% from Rs. 47.58 crore recorded in the same period last year.

Despite the decline in profit, the company’s revenue from operations increased 2.17% to Rs. 10.46 arba from Rs. 10.24 arba a year earlier.

The improvement in revenue, however, did not translate into higher operating earnings. Operating profit fell 28.65% to Rs. 74.01 crore from Rs. 103.72 crore. Cost of sales increased 3.73% to Rs. 9.07 arba, putting pressure on margins.

Other income also declined sharply by 48.96% to Rs. 2.66 crore, while administrative expenses increased 41.62% to Rs. 45.54 crore.

The company’s paid-up capital increased 11.28% to Rs. 1.90 arba, while other equity rose 31.58% to Rs. 7.66 arba.

On the balance sheet, property, plant and equipment stood at Rs. 9.28 arba, down 3.67% year-on-year. Trade receivables increased 2.94% to Rs. 1.47 arba.

Reliance Spinning Mills’ EPS fell 24.64% to Rs. 21.00 from Rs. 27.87. However, net worth per share improved 14.10% to Rs. 503.32 from Rs. 441.11.

At the end of the quarter, the company’s shares were trading at Rs. 2,970, giving it a P/E ratio of 141.42 times.

The results show a widening gap between Reliance Spinning Mills’ revenue growth and its bottom-line performance, with rising operating and administrative costs weighing on profitability.

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