Wires & Fabriks Reports Q1 Revenue Growth Amid Profit Decline; Independent Director to Step Down

Wires & Fabriks (S.A.) Limited , a prominent player in the industrial fabrics sector, has released its unaudited financial results for the quarter ended June 30, revealing a mixed performance with revenue growth but a decline in profitability.

Financial Highlights

The company reported a notable increase in revenue from operations, which rose to Rs 2794.78 lakh, up from Rs 2544.47 lakh in the same quarter last year, marking a 9.8% year-over-year growth. Total income for the quarter reached Rs 2815.22 lakh, compared to Rs 2650.46 lakh in the previous year's corresponding period.

However, despite the revenue growth, Wires & Fabriks experienced a significant decline in profitability. The company's profit for the period dropped to Rs 1.21 lakh from Rs 7.49 lakh year-over-year, representing a substantial decrease of 83.8%.

Key Financial Metrics

The company's earnings per share (EPS) also reflected the profit decline, dropping to Rs 0.04 from Rs 0.25 in the same period last year.

Operational Performance

The increase in revenue was accompanied by a rise in total expenses, which grew to Rs 2811.89 lakh from Rs 2628.64 lakh in the previous year. This 7.0% increase in expenses outpaced the revenue growth, contributing to the squeeze on profitability.

Corporate Governance Update

In a separate announcement, Wires & Fabriks disclosed that Mr. Saroj Khemka (DIN: 00489838) will complete his second consecutive term as a Non-Executive Independent Director on August 11. Consequently, Mr. Khemka will cease to be an Independent Director of the company effective August 12.

Management Commentary

The financial results were approved by the Board of Directors in a meeting held on August 8, which was reviewed by the Audit Committee and accompanied by a Limited Review Report from statutory auditors.

While the company has shown resilience in growing its top line amidst challenging market conditions, the significant drop in profitability may raise concerns among investors. The management will likely need to address cost pressures and operational efficiencies in the coming quarters to improve bottom-line performance.

Investors and stakeholders will be watching closely to see how Wires & Fabriks navigates these challenges and capitalizes on its revenue growth momentum in the subsequent quarters of the fiscal year.