The world’s second largest manufacturer of kids apparel has announced to withdraw Rs 3,500 crore investment from Kerala alleging harassment by state government officials. In the meantime, the apparels and accessories manufacturer also reported a 49.3 per cent decline in net profit of Rs 9.73 crore in March 2021 quarter, as against a net profit of Rs 19.22 crore in the same quarter previous year.
The company’s shares plunged over 10 per cent to Rs 111.35 on Wednesday. However, it recovered to Rs 114.95 at 9.45 am. BSE Sensex was trading at 52,638.54, 88.88 points, or 0.17 per cent, higher at the same time. The counter settled at Rs 124.15 on BSE on Tuesday.
Revenue from operations shrank 23.65 per cent to Rs 111.71 in the quarter ended on March 31, 2021 as against an income of Rs 146.32 crore in the same quarter a year ago.
The company had signed a memorandum of understanding with the Kerala government. The plan was to open an apparel park in Kochi and establish industry parks at Thiruvananthapuram, Kochi and Palakkad. The management said that various units of Kitex were raided 10 times by officials from various departments during the past one month.
Kitex Garments have underperformed BSE Sensex in the year 2021 so far. The counter has gained only 4 per cent, compared to a 10 per cent rally in the benchmark index.
For the full financial year 2020-21, the net profit of the company fell 45 per cent to Rs 59.9 crore as against Rs 108.67 crore in the previous fiscal. Revenue from operations slipped 40 per cent to Rs 465.49 crore during the period under review.
The company board has recommended a dividend of Rs 1.50 apiece for shares with a face value of Re 1 each, subject to shareholders approval.
