💰 Financial Performance

Revenue Growth by Segment

Ludlow Jute & Specialities Limited (LJSL) reported revenue of INR 300.97 Cr in FY25, a decline of 36.7% from INR 475.63 Cr in FY24. The combined Kankaria Group revenue was INR 1,097.82 Cr in FY25, down 5.2% from INR 1,158.21 Cr in FY24.

Geographic Revenue Split

Exports contributed INR 48.28 Cr (FOB value) in FY25, representing approximately 16.1% of LJSL's total sales of INR 298.29 Cr. Domestic sales accounted for the remaining 83.9%.

Profitability Margins

LJSL reported a Net Profit Ratio of -4% in FY25 compared to -3% in FY24. However, post-acquisition by Kankaria Group, operating margins have exceeded 10% in every quarter since March 2025, a significant turnaround from previous negative margins.

EBITDA Margin

The Kankaria Group's operating profitability was healthy at over 8.5% in fiscal 2025. LJSL's individual operating margins improved to over 10% per quarter post-September 2024 acquisition due to operational stabilization.

Capital Expenditure

The company recently installed 50 No. N4A automatic loom machines to improve manufacturing efficiency. Specific planned INR Cr expenditure for future periods is not disclosed in available documents.

Credit Rating & Borrowing

Crisil assigned a long-term rating of 'Crisil A-/Stable' and a short-term rating of 'Crisil A2+' to bank loan facilities totaling INR 148.71 Cr. Interest coverage for the group is estimated to improve to over 2.9 times for H1 FY2026.

⚙️ Operational Drivers

Raw Materials

Raw Jute (specifically TD-3 grade) is the primary raw material. The Cabinet Committee on Economic Affairs (CCEA) approved a Minimum Support Price (MSP) of INR 5,650 per quintal for FY26, a 5.9% increase from INR 5,335 in the previous season.

Import Sources

Raw materials are primarily sourced domestically from jute-growing states in India, with pricing highly regulated by the government through the MSP mechanism.

Key Suppliers

Not disclosed in available documents; however, the Office of the Jute Commissioner regulates the supply and procurement orders (PCSO).

Capacity Expansion

Current production was 25,573 M.T. in FY25, down 43.2% from 45,043 M.T. in FY24. The company has recently modernized by installing 50 automatic loom machines.

Raw Material Costs

Raw material costs are a major component of revenue; the MSP increase of INR 315 per quintal (5.9%) directly impacts input costs, though the industry expects arrears from retrospective price calculations for government supply.

Manufacturing Efficiency

Production efficiency is being addressed through the installation of automatic looms. Production volume fell 43.2% YoY in FY25 due to operational inefficiencies prior to the Kankaria Group acquisition.

📈 Strategic Growth

Expected Growth Rate

12.5%

Growth Strategy

Growth will be achieved through the turnaround of acquired underperforming mills (like LJSL), leveraging the Kankaria Group's 40+ years of experience. The strategy includes improving operating margins to >10% and maintaining a strong market position with a 9.6% share of government PCSO orders.

Products & Services

Jute Goods including B-Twill jute bags for government packaging, Jute sacking, Board & Jute Horticultural Pots, and diversified jute products for export.

Brand Portfolio

Ludlow Jute & Specialities Limited.

New Products/Services

The company has recently introduced Board & Jute Horticultural Pots and is focusing on manufacturing diversified jute products to cater to global demand for sustainable materials.

Market Expansion

The company targets the global jute market, which is projected to grow at a CAGR of 12.5% through 2029, by focusing on sustainable and biodegradable materials for export.

Market Share & Ranking

The Kankaria Group holds a strong market position with over 9.6% of the monthly jute production control-cum-supply order (PCSO) procurement as of November 2025.

Strategic Alliances

LJSL is part of the Kankaria Group, which includes Bally Fabs International Ltd, Ambica Jute Mills Ltd, Bally Jute Co Ltd, and Kelvin Jute Ltd, providing operational and financial linkages.

🌍 External Factors

Industry Trends

The global jute market is evolving toward sustainable and biodegradable packaging, with a projected CAGR of 12.5% (2025-2029). The industry is shifting from manual to automated processes to improve productivity.

Competitive Landscape

Key competition comes from synthetic packaging manufacturers and other large jute groups. The industry is highly regulated, which limits pure market-based competition.

Competitive Moat

The company's moat is built on its 9.6% share of government-mandated procurement orders and the promoters' 40-year track record in turning around distressed jute assets. This is sustainable as long as the Jute Packaging Material Act remains in force.

Macro Economic Sensitivity

Highly sensitive to government agricultural policies and the Jute Packaging Material Act 1987, which mandates jute usage for essential commodities.

Consumer Behavior

Increasing global consumer preference for eco-friendly and biodegradable products is driving demand for jute-based horticultural pots and diversified products.

Geopolitical Risks

Global demand for sustainable materials is a positive driver, but the industry is exposed to international competition from synthetic alternatives and other jute-producing nations.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Jute Packaging Material Act 1987 (mandatory 100% jute for food grains, 20% for sugar) and the Jute & Jute Textiles Control Orders 2000 & 2016 issued under the Essential Commodities Act, 1955.

Environmental Compliance

The company focuses on sanitation and hygiene as part of staff welfare; however, specific ESG compliance costs in INR are not disclosed.

Legal Contingencies

The company identifies litigation as a factor that could impact results, but specific pending court cases or case values in INR are not disclosed in the available documents.

⚠️ Risk Analysis

Key Uncertainties

The regulated nature of the industry exposes the group to policy changes (e.g., changes to the Jute Packaging Act). Climate change risks to jute cultivation could impact raw material availability by 10-15%.

Geographic Concentration Risk

Revenue is heavily concentrated in India due to government procurement orders, with exports representing approximately 16.1% of sales.

Third Party Dependencies

High dependency on the Office of the Jute Commissioner for PCSO allocations, which ensure baseline revenue for the group.

Technology Obsolescence Risk

The industry relies on manual processes; the company is mitigating this by installing automatic looms, but the overall lack of industry R&D remains a risk.

Credit & Counterparty Risk

Trade receivables turnover ratio declined to 10.24 in FY25 from 16.18 in FY24, indicating a slowdown in collections, although receivables are generally maintained at 30 days.