Highlights of the call are:

• The company has reported scintillating growth of 93% to Rs 105.48 crore in total income from operations and 110% jump in the Net Profit at Rs 6.51 crore for the quarter ended March 11. Increase in the recycling capacity and the prices have resulted in robust revenues in the quarter under review. However, the Operating margins were under pressure and slipped by 110 bps to 11.7% on the back of spike in the raw material cost. The raw material cost has almost doubled from Rs 27 to Rs 50 in Q4FY11. On the other hand, it has also provided provision of Rs 85 lakh on account of doubtful advances in Q4FY11.
• For the year, Net Profit of Ganesh Polytex has doubled to Rs 18.02 crore over 46% jump in the total income from operations at Rs 291.50 crore. OPM inched up by 30 bps to 12.5% in the period under review. For the year, OPM was under pressure on account of excise duty levy on Kanpur plant from 3QFY11.
• The average price of yarn is Rs 157 per Kg and that of fiber is Rs 88 per Kg at end of March 11.
• Headquartered at Kanpur, the company has waste recycling capacity of 57600 ton per annum and yarn fiber dyeing capacity of 2400 MT per annum. It has 25 own franchise centers for collection of waste across India which constitutes 30-35% of the company's raw material requirement. Besides these, the company acquires scrap from scrap dealers (raw material cost from these other scrap dealers is 4-5% higher) and imports from Singapore etc.
• The company has planned for Capex of Rs 125 crore capacity expansions. It is expanding its recycling capacity by 14000 MT and 25000 spindles for yarn spinning. The total Capex will be completed by end of Q1FY13. 65% of the Capex is accrued through debt and the remaining 35% from Equity and internal accruals. As a part of equity, the company has raised Rs 13.5 crore from IFCI venture Capital and Rs 9 crore from conversion of warrants from the promoters. Of the Rs 82 crore of debt, the company has TUFS loans amounting nearly to Rs 40 crore. The average cost of debt is 12.-14%.
• With increase in debt, the management expects DE ratio which is below 1 currently, to increase to 1.4 in FY12.
• The management expects margins to expand to 13-16% after the commission of forward integration facility of yarn. It also expects revenues to grow by CAGR of 35% for FY12.
• The company has allotted 300,000 equity shares of Rs 10 each to persons other than promoters against exercise of option attached to warrants earlier allotted to them on preferential basis and proceeds of the issue have been utilized for general corporate purpose.
• The board has recommended dividend of Rs 1.20 per share on equity shares of Rs 10 each for FY11. It has also recommended dividend of Rs 10 per share on 10% cumulative redeemable preferential shares having nominal value of Rs 100 each for FY11.