The Hindu Business Line : GHCL plans more M&As; income rises 28% in Q3

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Ahmedabad Jan. 29 After the successful integration, last year, of its acquired businesses in the US and the UK, Gujarat Heavy Chemicals Ltd (GHCL) is expecting to acquire more companies in Europe, America and in China by the end of March this year.

The GHCL Chairman and Managing Director, Mr Sanjay Dalmia, told Business Line the acquisitions would be in both textile and soda ash sectors, the core businesses of the group.

Q3 performance

In the third quarter ended December 2006, GHCL's income from operations increased by 28 per cent from Rs 169.22 crore to Rs 217.05 crore. The textile division revenue accounted for 26.6 per cent (Rs 57.63 crore) of the total business, with a growth of 29 per cent year-on-year.

Textile division revenue during the quarter witnessed a growth of 67 per cent over the quarter ended September 2006.

The EBIDTA for the quarter was higher at 32 per cent at Rs 61.68 crore, as against Rs 46.86 crore reported in December 2005. Profit after tax, at Rs 31.07 crore (Rs 26.55 crore),was higher by 17 per cent.

For the 12-month period ended December 2006, the total income from operations was Rs 821.03 crore as against Rs 629.20 crore in the year ended December 2005, a rise of 30 per cent. EBIDTA increased by 30 per cent from Rs 172.72 crore to Rs 224.61 crore, while PAT increased by 25 per cent from Rs 91.98 to Rs 114.94 crore.

Buying spree

In 2006, GHCL had, through its overseas subsidiary, acquired Dan River Inc, a leading player in the US home textile market with an annual turnover of $250 million. It had also acquired over 100 per cent of the shares of the UK's largest home textile retailer, Roseby's, at a cost of $40 million. Roseby's had an annual turnover of $250 million and more than 300 retail outlets.

In the soda ash business, the company had acquired a majority stake in S.C. Bega Upsom S.A., a leading soda ash manufacturer in Romania. The total soda ash capacity of the Indian and Romanian units was now 11.5 million tonnes per annum.

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