Hit by Cost Increase

Hit by Cost Increase Hansavivek RAYMOND WOOLLEN MILLS has suffered contraction of margins during 1984-85. While turnover amounted to Rs 133.56 crore against Rs 98.66 crore in the previous year, gross profit increased comparatively modestly from Rs 12.02 crore to Rs 13.87 crore. What is more, even this profit includes incremental profit of Rs 2.38 crore arising as a result of changes in the method of accounting in respect of duty drawback, etc, on exports and in respect of machinery spares. The drop in profitability was caused mainly by disruption of the worsted textile operations and all round increases in costs, including a Very sharp' rise in packing material cost. Moreover, lower price realisation and continuing unremunerative prices of levy cement in the cement division, only partial operation of the new woollen plant at Jalgaon and increase in interest costs com- bined to erode margins. With depreciation claiming more, net profit is Rs 5.03 crore (Rs 4.30 crore). The unchanged dividend of 20 per cent is covered 2.75 times by earn ings as against 2.35 times previously.