Higher sales lift Interloop’s net income by 2.7x YoY in 1QFY21

October 29, 2020 (MLN): Interloop Limited has announced its financial results for 1QFY21, wherein the company reported its net profit after tax of Rs 1.33 billion (EPS: Rs1.53), up by 2.7x YoY, compared to Rs 491 million (EPS: Rs 0.56) in the same period last year.

The increase in profitability of the company was attributable to higher than expected revenues and gross margins.

During the 1QFY21, the top line witnessed a surge of 39% YoY to Rs 13 billion, led by higher export sales, likely in both the Hosiery and Denim segments, in the viewpoint of Intermarket Securities research, resulting in a 49% YoY increase in gross profits despite an increase in the cost of sales.

On the cost front, the positive highlight is the decrease in its major expense heads as distribution cost came down by nearly 14.5% YoY. While administrative cost and other expenses jumped by 23.5% and 4 times, YoY, respectively.  

Meanwhile, finance costs of the company rose by 35% YoY to Rs 239 million from Rs 177 million, due to an increase in short term borrowings amid higher sales, as per a report by Intermarket Securities.

Effective tax rate clocked in at 5% compared to 13% last year, potentially due to greater exports, the report further added.

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