Rajapalayam Mills Plans Rs 400 Cr Capacity Expansion

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P. R. Venketrama Raja, Chairman, Ramco Group

Rajapalayam Mills Ltd, part of the Ramco Group, is investing Rs 400 crore to expand its fabric division’s capacity in view of the favourable order outlook. The company, a leading manufacturer of cotton yarn and fabrics, has been receiving many enquiries from leading brands worldwide for the supply of processed fabric. The special value-added fabric produced on its jacquard looms have been well received in export markets.

“Since the demand for our quality fabric is very much encouraging, the company is expanding its fabric division by adding 166 looms and establishing a new unit with a capacity to process 50,000 metres of fabric per day at Rajapalayam. Also, it will install 110 KVA/11 KVA own substation inside its Rajapalayam premises to strengthen its electricity infrastructure,” the company said.

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The Rs 400 crore investment will be funded from the internal accruals/equity instruments and term loans from banks.

New fabric unit
Meanwhile, the fabric unit commissioned during FY22 is successfully running with the capacity of 146 looms. In FY22, the mill produced 79 lakh metres of fabric as compared to 39 lakhs metres in the previous financial year. The total revenue generated by the fabric unit for FY22 was Rs 122 crore (Rs 39 crore in FY21), and exports stood at Rs 31 crore (Rs 11.5 crore in FY21).

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Financial performance
The company’s FY22 l revenue was at Rs 705 crore, up from Rs 429 crore in FY21. Its sales of yarn grew to Rs 550 crore in FY22 as compared to Rs 363 crore in FY21.

For the first quarter of this fiscal, its total revenue grew to Rs 204 crore against Rs 134 crore in the year-ago quarter, while profit after tax rose to Rs 18 crore compared to Rs 5 crore.

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