SL's long-term association with customers involving internationally recognized brands has attracted business concentration with them which is effectively being managed by establishing marketing channels in its key export markets as well as new markets. During FY16, SL export revenue depicted sizeable growth despite a fall in country's overall exports under home textile segment.
Gross margin of the company are strong and have improved during the outgoing year on account of improved prices of finished products, lower average cost of raw material and reduced wastage. Increased margins and higher volumetric sales translated into improved bottom line for the company.
Debt levels have increased with higher utilization of short-term borrowings to support receivables, inventory and matching working capital requirements. Nonetheless, the company maintains adequate debt coverage while capitalization indicators have also improved on the back of profit retention. Efficiency enhancements from the planned CAPEX are likely to further improve company's cash flows enabling SL to meet higher debt servicing requirements over the medium to long-term.