Textile producer Sintex Industries sees profit fall, defaults on debt

The textile manufacturing business Sintex Industries Limited has defaulted on Rs 86 crore ($12.9 million) of non-convertible debentures. The business’ profits had also fallen in the 2019 financial year.

Sintex has defaulted on its debt - Sintex Plastics Technology Limited- Facebook

Sintex Industries made an exchange filing on June 12 stating that it had defaulted on its Rs 86 crore debt, Mint reported. The business’ ratings had been downgraded by CARE Ratings this week. Sintex Industries, which is part of Sintex Group, is a large Indian textile and yarn producer.  

CARE Ratings had downgraded the business to the category “issuer non-cooperating" because the business had not provided the agency with information for its ranking and had not paid the necessary surveillance fees for the rating exercise. 

“The outlook on the rating is negative on the expectation that Sintex Industry Ltd’s debt coverage and liquidity indicators would worsen further on the back of high debt repayment obligations in the near-term especially in the light of elevated raw cotton prices and competitive cotton yarn market which is likely to exert pressure on its profitability margins and cash flows going forward," said CARE Ratings in a statement.

Sintex saw its profits fall in the 2019 financial year to total Rs 21.5 crore compared to Rs 141.8 crore in the 2018 financial year. The business’ debt also rose to Rs 5,871 crore at the end of the 2019 financial year up from Rs 5,294 crore the year before. 

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