NewsEarningsHindoostan Mills Reports Profit in Continuing Operations Amid Textile Division ClosureHindoostan Mills Reports Profit in Continuing Operations Amid Textile Division Closure
Hindoostan Mills Limited announced its Q1 FY2024 results, showing a profit of Rs. 104.70 lakhs from continuing operations (Engineering segment) compared to a loss in the previous quarter. However, the company reported an overall net loss of Rs. 119.08 lakhs due to losses from discontinued textile operations. The Textile Division has been closed following a Board decision on April 15, with final closure order received on June 19. All workers from the discontinued division have been retrenched. Net sales from operations decreased to Rs. 341.26 lakhs from Rs. 383.12 lakhs in the preceding quarter. The company now operates solely in the Engineering segment.
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Hindoostan Mills Limited , a diversified company, has announced its financial results for the quarter ended June 30, revealing a mixed performance as the company undergoes significant operational changes.
Continuing Operations Show Improvement
The company's continuing operations, which now solely comprise the Engineering segment, reported a profit of Rs. 104.70 lakhs for the quarter. This marks a substantial improvement from the loss of Rs. 10.46 lakhs recorded in the previous quarter. However, net sales from operations decreased to Rs. 341.26 lakhs from Rs. 383.12 lakhs in the preceding quarter.
Discontinued Textile Operations Impact Overall Results
Despite the positive performance in continuing operations, Hindoostan Mills reported an overall net loss of Rs. 119.08 lakhs. This loss is primarily attributed to the discontinued textile operations, which incurred a loss of Rs. 223.78 lakhs during the quarter.
Textile Division Closure
The Board of Directors made a significant decision on April 15 to close down the Textile Division. The company received the final closure order on June 19 from the Ministry of Labour, State Government of Maharashtra. As a result of this closure, all workers from the discontinued division have been retrenched.
Financial Highlights
| Particulars | Q1 (Rs. in Lakhs) | Q4 (Rs. in Lakhs) |
|---|---|---|
| Net Sales from Operations | 341.26 | 383.12 |
| Profit/(Loss) from Continuing Operations | 104.70 | (10.46) |
| Loss from Discontinued Operations | (223.78) | (205.15) |
| Net Loss | (119.08) | (215.61) |
Other Notable Points
- Other income for the quarter included fair value gains on mutual fund investments amounting to Rs. 122.19 lakhs.
- Basic earnings per share from continuing operations stood at Rs. 6.29, compared to a loss of Rs. 0.63 in the previous quarter.
- The company now operates only in the Engineering segment as a continued operation.
Management Commentary
The management of Hindoostan Mills Limited stated that the decision to close the Textile Division was made after considering the outlook and scenario of the Textile business. They have recognized the likely adverse impact on assets and liabilities, including workers' liabilities, of the Discontinued Division in the previous period.
Future Outlook
With the closure of its Textile Division, Hindoostan Mills is now focused on its Engineering segment. The company's ability to turn a profit in its continuing operations despite the overall loss suggests a potential for improved performance in the coming quarters, as it streamlines its business focus.
Investors and stakeholders will be keenly watching how Hindoostan Mills navigates this transition period and capitalizes on its engineering capabilities in the future.
Historical Stock Returns for Hindoostan Mills
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +2.79% | +0.71% | +3.06% | -6.06% | -21.42% | -3.86% |
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