Gujarat Heavy Chemicals (GHCL) reported a good set of earnings for the quarter ended June 2021 led by the textile business. The company’s revenue surged and margins expanded year on year (YoY).
The company has almost reached pre-COVID levels and is bullish on the soda ash business. Speaking to CNBC-TV18, RS Jalan, managing director of the company said that the margins in the textile business were also improving.
“We have almost reached pre-COVID levels. Margin will be good in the textile business, but I am more bullish on the soda ash business. The trend of soda ash margin expansion is visible and in the next few quarters the margins will expand in this business,” said Jalan.
During the quarter, the company faced costs pressure due to higher fuel costs, he added.
The company has been able to increase soda ash prices by 10-12 percent whose impact is expected to be seen in the coming quarter.
Meanwhile, Jalan expects the Rebate of State and Central Taxes and Levies (RoSCTL) Scheme to make the textile industry competitive and believes that the next few quarters would be strong for the industry.
According to him, the margin textile business will improve going ahead.
“Overall margin has significantly improved from 18 percent to 23 percent. Therefore, we believe that the next few quarters are going to be good because of a couple of positive things which happened,” said Jalan.
For the entire management interview, watch the video