Punjab based Trident Ltd is one of the largest yarn spinners in India, also one of the world’s largest terry towel manufacturers and the world’s largest wheat straw based paper manufacturer. The company posted a very good Q1FY16 performance. Though the company reported a 3% (YoY) drop in net sales at Rs.874 crore, it ended the quarter with a whopping 91% surge in net profit at Rs.61 crore. This net profit in Q1 is 52% of entire FY15 net profit of Rs.118 crore.

What really helped the company was the drop in raw material prices. During current Q1, it showed a 20% decline and with raw material cost accounting for 54% of total operating cost, the total costs came down 6%. This helped improve the EBITDA by 8% at Rs.196 crore and margins came in at 22.42% v/s 20.22%. Interest costs were also down by 24%.

Looking ahead, some flash floods in Madhya Pradesh in July affected operations and we could see some effect of the same in the Q2 numbers. But if topline manages to surge, the effect of the flood could get mitigated.