Supertex Industries Achieves major turnaround milestone with OTS

Supertex Industries Ltd has announced that the Company has achieved a major turnaround milestone. After continuous negotiations with the State Bank of India and IDBI Bank, whose outstanding was Rs 17.68 crores they have agreed to the Company’s proposal to settle their outstanding for Rs 3.45 crores. With this settlement the book profit of the Company would be over Rs 14 crores which is twice the share capital of the Company.

The Company would also receive major extension of sales tax and income tax benefits, electricity duty rebate and other benefits resulting in a total turnaround of the Company.

Further, earlier the Company had undertaken a business process re-engineering exercise. This was done in-house as well as by appointing reputed professionals of various field. The exercise has resulted in optimisation of many processes which were unattended in the past. The Company can now claim that it has been able to bring down its operating costs at very low levels. The fact that cash breakeven, achieved at a meagre 28% capacity utilisation (achieved in the year 2005-06), proves the success of this process reengineering exercise. The low capacity utilisation in the past which was caused by the poor availability of raw material has been more than overcome due to the expansion by the raw material manufacturers, which has put your Company in a very comfortable position. Further, the Company has developed various new products like the high quality filament yarn on beams and beams of nylon, lycra etc. It has also started processing nylon for a large corporate house.

Mr. R K Mishra, Managing Director, believes that the worst time for the Company has passed and it is looking at a bright future. He believes your Company would really be a turnaround story for its shareholders.

Further, the core management committee is meeting on December 19, 2006 to discuss the future growth plans.

Source : Equity Bulls

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