Himatsingka Seide (HSL), a textile firm, disappointed the markets with very discouraging results. Call it the pain of growing but losses is something which investors, at this point of time are not able to digest. The company made news when it sued HDFC Bank for its MTM losses, alleging that the company had incorrectly sold derivative contracts that go against the central bank's guidelines on these products. And looks like the company continues to pay the price on these “exotic” investments.
On a consolidated basis, for the first quarter ended 30th June 2008, though it managed to show a major jump in its revenue, operating expenses first took its toll. And then the company had an exceptional item of Rs.44.84 crore of which Rs.20.39 crore was on account of forex losses. Consequently, the company ended the first quarter with a net loss of Rs.58.56 crore.
The company had ended FY08 itself on a net loss of Rs. 23.99 crore and this was mainly on account of the new bed line manufacturing facility, which was commissioned in October 2007 at Hassan Special Economic Zone, Karnataka. Total investment in that facility was at Rs.437 crore. In Q4FY08, the company had an exceptional loss of Rs.27.77 crore, which was again due to MTM loses.
The entire focus of the company, in FY09 is on stabilising the greenfield facility at Hassan, and continue to explore growth opportunities in emerging markets in retail and distribution.
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