Surat Trade - Surat Trade

📊 BSE: 530185 🏢 Other Textile Products 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

The company generated INR 68.64 Cr in revenue from its new commodity trading segment in FY25. Historically, the textile manufacturing segment saw revenue grow 44.8% in FY18 (INR 203.16 Cr) and 8.2% in FY19 (INR 219.82 Cr) before the strategic pivot to trading.

Geographic Revenue Split

The company primarily serves the domestic Indian market, particularly through its manufacturing base in Surat, Gujarat. Specific regional percentage splits for the new trading business are not disclosed.

Profitability Margins

Historical manufacturing margins showed a declining trend: PBILDT margin was 10.45% in FY17, 7.84% in FY18, and 5.49% in FY19. PAT margin fluctuated from 11.9% in FY17 to 4.03% in FY18 and 5.53% in FY19.

EBITDA Margin

Historical PBILDT was INR 12.07 Cr in FY19, representing a 5.49% margin. This was a 24.2% YoY decrease from INR 15.93 Cr in FY18, reflecting susceptibility to raw material price fluctuations in the textile business.

Capital Expenditure

Historical manufacturing capacity includes 25,000 MTPA for polyester chips and 5,000 MTPA for POY. Specific planned CapEx for FY26 is not disclosed in available documents.

Credit Rating & Borrowing

Credit rating is currently not applicable as the company has no debt instruments or fixed deposits as of March 31, 2025. Historically, it held a CARE BBB-; Stable rating in 2019 with a 0.00x gearing ratio.

⚙️ Operational Drivers

Raw Materials

Key raw materials for manufacturing include Purified Terephthalic Acid (PTA) and Mono-ethylene Glycol (MEG). For the trading segment, the company deals in various commodities via exchanges.

Import Sources

Raw materials like PTA and MEG are largely procured from domestic suppliers within India, reducing international shipping risks.

Capacity Expansion

Current installed capacity is 25,000 MTPA for polyester chips and 5,000 MTPA for partially oriented yarn (POY). No specific expansion timeline is provided.

Raw Material Costs

Raw material costs are a major driver; historical profitability was constrained by the susceptibility to fluctuations in PTA and MEG prices, which are crude oil derivatives.

Manufacturing Efficiency

The company conducts physical verification of Property, Plant, and Equipment (PPE) in a phased manner over 3 years to ensure asset integrity.

Logistics & Distribution

The company leverages its strategic location in Surat, Gujarat, a major textile hub, to optimize distribution to the domestic market.

📈 Strategic Growth

Growth Strategy

The company is pivoting from textile manufacturing to commodity trading (commenced Q3 FY23) to diversify revenue. This strategy involves buying/selling via exchanges and using derivatives to hedge price risks, aiming for higher scalability than traditional manufacturing.

Products & Services

Polyester chips, partially oriented yarn (POY), and traded commodities (including commodity-related business activities).

New Products/Services

Commodity trading and related activities, which contributed INR 68.64 Cr to revenue in FY25.

Market Expansion

The company is expanding its presence in the commodity mercantile space, moving beyond its traditional textile manufacturing roots.

Market Share & Ranking

The company operates in a highly competitive and fragmented textile industry, which translates into limited pricing power.

🌍 External Factors

Industry Trends

The textile industry is highly fragmented and competitive. The company is positioning itself for the future by diversifying into commodity trading, which offers a different risk-reward profile than capital-intensive manufacturing.

Competitive Landscape

Key competitors include other domestic polyester and yarn manufacturers and commodity trading firms in a highly fragmented market.

Competitive Moat

The company's moat is built on its experienced promoters and a 75-year history (incorporated 1945) in the textile business, providing deep industry relationships and market knowledge.

Macro Economic Sensitivity

The company is sensitive to inflation and crude oil prices, as PTA and MEG are petroleum-based derivatives.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by SEBI (Prohibition of Insider Trading) Regulations and SEBI (LODR) Regulations. The company recently updated its Whistle Blower and Insider Trading policies to align with new regulatory standards.

Environmental Compliance

The company follows 'Go Green' initiatives by digitizing shareholder communications to reduce paper waste.

Legal Contingencies

The company reported zero pending litigations as of March 31, 2025, and no penalties or strictures from SEBI or Stock Exchanges in the last 3 years.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is commodity price risk in the new trading segment, which could impact the INR 68.64 Cr revenue stream if hedging is ineffective.