💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) moderated by 6% YoY to INR 823.32 Cr in FY24 from INR 876.03 Cr in FY23, primarily due to a decline in the realization price of yarn despite stable volumes.

Geographic Revenue Split

Export revenues contributed 52% (approx. INR 428.13 Cr) of total income in FY24, showing an increase from 46% in FY23, while domestic sales accounted for the remaining 48%.

Profitability Margins

Net Profit Margin (PAT) stood at 2.27% in FY24 compared to 2.80% in FY23. The decline was driven by higher interest costs and moderated realizations, though operating margins remained stable.

EBITDA Margin

EBITDA margin (PBILDT) was 10.66% in FY24 (INR 87.80 Cr) compared to 10.57% in FY23 (INR 92.56 Cr). Margins are projected to improve to 12-13% in FY25-26 due to a higher mix of value-added products.

Capital Expenditure

The company is executing a planned capital expenditure of INR 65.00 Cr over FY25 and FY26, funded 74% via term loans and 26% through internal accruals, for machine upgradation and a new boiler installation.

Credit Rating & Borrowing

Ratings were upgraded in July 2025 to CARE BBB+; Stable (Long Term) and CARE A3+ (Short Term) from CARE BBB and CARE A3 respectively, reflecting improved cash flows and operational performance.

⚙️ Operational Drivers

Raw Materials

Cotton is the primary raw material, accounting for 55-60% of the Total Operating Income. Other materials include Viscose, Polyester, Acrylic, Linen, and Wool for blended yarn production.

Import Sources

Sourced primarily from domestic markets in India, with availability influenced by the Cotton Corporation of India's procurement activities.

Key Suppliers

Not specifically named, but procurement is heavily influenced by the Cotton Corporation of India (CCI) and local cotton markets.

Capacity Expansion

Current installed capacity includes 1,10,000 spindles, a yarn/fibre dyeing capacity of 30 MT per day, and a knitting capacity of 8 MT per day. Planned capex focuses on balancing machinery rather than massive spindle addition.

Raw Material Costs

Raw material costs represent 55-60% of revenue. In FY24, profitability was impacted by the volatility in cotton prices, which are sensitive to international trends and monsoon patterns.

Manufacturing Efficiency

Efficiency is driven by the 3.5 MW captive hydro power and the shift toward higher-margin specialty products like slub and gassed mercerized yarns.

Logistics & Distribution

Not specifically disclosed as a percentage, but the company serves global brands like GAP and H&M through intermediary garment manufacturers.

📈 Strategic Growth

Expected Growth Rate

7-9%

Growth Strategy

Growth will be achieved through a 7-9% projected revenue increase in the cotton yarn sector for FY26, driven by a rebound in exports to China and increased domestic demand. The company is specifically targeting higher-margin value-added products and upgrading machinery to improve throughput and reduce steam costs via a new boiler.

Products & Services

100% cotton yarn, blended yarns (viscose, polyester, acrylic, linen, wool), melange yarn, solid dyed yarn, and knitted fabrics.

Brand Portfolio

Winsome Textile Industries Limited (primarily B2B supplier to global brands).

New Products/Services

Expansion of the value-added yarn matrix including specialty products like slub yarn and gassed mercerized yarns to meet increasing customer compliance and demand.

Market Expansion

Targeting increased export share (already at 52%) with a focus on the US economy revival and luxury sectors which are less sensitive to economic cycles.

Market Share & Ranking

Recognized as one of the largest manufacturers of melange and dyed yarn in India.

🌍 External Factors

Industry Trends

The industry is shifting toward luxury and value-added textiles; India's cotton yarn sector is expected to grow 7-9% in FY26 due to stable cotton availability and export recovery.

Competitive Landscape

Faces competition from other Indian spinners, but the niche focus on melange and dyed yarn provides a buffer against grey yarn price wars.

Competitive Moat

Moat is built on a 100% value-added product portfolio and large-scale melange yarn capacity, which is difficult for smaller players to replicate due to technical complexity and high working capital needs.

Macro Economic Sensitivity

Highly sensitive to monsoon impact on cotton crop yields and global demand recovery in the US and China.

Consumer Behavior

Increasing demand for sustainable and specialty blended fabrics from global apparel brands.

Geopolitical Risks

Susceptible to international trade barriers and export bans on yarn which can limit access to key markets like China.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily impacted by the government's Minimum Support Price (MSP) for cotton and potential export bans or withdrawal of duties on yarn.

Environmental Compliance

Investing in a new boiler to meet increasing environmental and sustainability compliances required by global customers.

Taxation Policy Impact

Not specifically disclosed as a percentage, but follows standard Indian corporate tax norms.

Legal Contingencies

No material uncertainty exists regarding the company's capability to meet liabilities; no specific pending court case values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Volatility in cotton prices (55-60% of costs) and government regulatory shifts (MSP/Export bans) are the primary business risks.

Geographic Concentration Risk

52% of revenue is from exports, making the company vulnerable to global trade dynamics and US/China economic health.

Third Party Dependencies

High dependency on cotton farmers and the Cotton Corporation of India for raw material supply.

Technology Obsolescence Risk

Risk is mitigated by the planned INR 65 Cr capex for machine upgradation and addition of balancing machinery.

Credit & Counterparty Risk

Liquidity is adequate with projected GCA of INR 62.53 Cr in FY26 against repayments of INR 41.54 Cr; however, working capital utilization is high at 98%.