Despite severe disruptions in Indian domestic demand for yarn, including deferment of shipment and delay in the orders due to COVID-19 pandemic, SVP Global Venture Ltd has managed to leverage on its vast distribution network to selectively focus on more profitable markets overseas to overcome the exigency. The company has orders valued at Rs. 5,000 crore.

SVP Global’s revenue rebounded to Rs. 364 crore in Q2FY21 compared with Rs. 91.82 crore in last quarter. The company’s profitability stood at Rs. 10.75 crore in Q2FY21 as against a loss of Rs. 57.44 crore in last quarter, primarily attributed to the COVID-19 lockdown. The company currently has sales tie-ups and yarn offtake arrangements for the next 2-3 years of production, valued at Rs. 5,000 crore, from buyers across the global textile markets, it said in a press release.

SVP’s focus over the last few years has been to exit from low margin and non-core business and focus on high margin compact yarn capacity expansion. This has reflected in overall EBITDA margin improvements to 16.51 per cent in FY 2019-20 against 14.87 per cent in FY 2018-19, registering a growth of 12.4 per cent year-on-year. PAT and EPS registered a growth of 10.6 per cent and 11.9 per cent respectively during the same period.

“The current capacity utilisation level is now back to pre-COVID levels and stood at more than 95 per cent for Indian operations and around 50 per cent for Oman operations. In Oman, ramping of the capacity utilisation is currently in process for the recently set up 150,000 spindles which is expected to operate at target more than 95 per cent in coming quarters,” the release said.

“SVP’s quick response to competing in the global market has been its integration of latest manufacturing technology well adopted into business operations and capacity expansion. The company expanded its manufacturing operations in 2016 by setting up and starting commercial operations from state-of-the-art, most modern and automated 150,000 spindles and 2,400 rotors cotton yarn manufacturing facility in Jhalawar, Rajasthan. Constant innovation and adoption of new technology have become an essential element for competitive advantage in the global market and SVP has maintained quick and flexible responses to market demand using technologies, consumer behaviour and expectations. In addition, digital transformation has fuelled remarkable advancements in manufacturing technologies and expansion of existing capacities enabling the company to move from labour-intensive to capital-intensive production,” said Vinod Pittie, chairman, Shri Vallabh Pittie Group.

“Between 2018-2019, we commenced commercial operations of a manufacturing unit of 3,500 rotors and 150,000 spindles in Oman. As on date, the company has an aggregate manufacturing capacity of 4,00,000 spindles and 5,900 rotors in India and Oman. Major problem existing with the Indian manufacturers is the lack of scale, low manpower efficiency and lesser focus on research and innovation activities,” Pittie added.

In FY20, SVP Global Ventures generated an operating income of Rs. 14,098 million and reported a EBITA of Rs. 2,328 million and PAT of Rs. 511 million.