What remains in the puzzle is how come Kitex is doing 20% EBITDA margins when the norm is 10%? is this sustainable? why?
This is somewhat like the Mayur story - where the norm is somewhere but the shining knight in the industry was operating at some other level. There its was because of continuous process improvements and de-bottlenecking exercises. Mayur used to hire consultants to come down every month from Delhi at RS 2 lakhs/visit. I remember with the help of the consultant Fabric roll changeover - that used to take 45 minutes was brought down to as low as 5 minutes in a years time. That led to a major boost to utilisation levels and small small stuff like that made the difference. However Kitex’s is a much more labour intensive process.
So understanding the sources/key factors behind the high EBITDA and the role/scope of automation in future-scale up are the two key areas to solve the Kitex puzzle, for me.
Balkrishna - and others friends from Textile Industry - please get to work and help us connect with the right folks so we can dig into this better.