💰 Financial Performance

Revenue Growth by Segment

Total revenue declined by 21% YoY to INR 40.2 Cr in FY25. The Garment division, the primary driver, saw revenue drop 16.9% to INR 37.60 Cr from INR 45.26 Cr. The Roofing sheet division experienced a sharper decline of 53.9%, falling to INR 2.60 Cr from INR 5.64 Cr in the previous year.

Geographic Revenue Split

Not disclosed in available documents, though operations are centered in Karur, Tamil Nadu (textiles) and Kizhakkambalam, Kerala (roofing).

Profitability Margins

Net Profit Ratio significantly compressed to 4.20% in FY25 from 9.23% in FY24. This decline was driven by a 16.9% drop in garment sales and a 53.9% drop in roofing sales, alongside rising raw material costs which squeezed the bottom line.

EBITDA Margin

Operating (EBITDA) margins declined to approximately 13% in FY25 from over 20% in previous years. This 700+ basis point drop is attributed to intense competition in the textile sector and a slump in international off-take, which reduced the company's pricing power.

Capital Expenditure

The company previously invested in a 3.2 Tons per day knitting unit at its Karur factory. Currently, it is proposing an Industrial Infrastructure Project (Private Industrial Park) on 52 acres of land in Palakkad, Kerala, to diversify its asset base.

Credit Rating & Borrowing

CRISIL reaffirmed ratings at 'BB-/Stable/A4+' for INR 30.9 Cr of bank facilities. While the company benefits from promoter funding, its financial profile is constrained by a leveraged capital structure with a gearing of 3.2 times as of March 31, 2025.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Cotton (for knitwear) and Aluminium/Galvanized Iron (for roofing sheets). Cotton costs are highly sensitive to Minimum Support Price (MSP) operations, which covered 34% of total Indian production in the 2024-25 season.

Import Sources

Primarily sourced domestically within India; the company notes that India is the world's second-largest producer of textiles, providing a strong local supply base.

Key Suppliers

The Cotton Corporation of India Ltd. (CCI) is mentioned as a major nodal agency for cotton procurement under MSP, impacting the company's input pricing.

Capacity Expansion

Current knitting capacity is 3.2 Tons per day at the Karur plant. Future expansion is focused on the 'Private Industrial Park' under the PIE scheme in Kerala to leverage 52 acres of owned land.

Raw Material Costs

Raw material costs have seen a 'faster hike,' adversely affecting all textile sectors. The company notes that increased input costs in India are leading to higher production costs, which directly contributed to the EBITDA margin drop from 20% to 13%.

Manufacturing Efficiency

Manufacturing efficiency is challenged by a lack of R&D investment, which is noted as being 'very low' across the Indian textile firm landscape. The company's ROCE fell to 4.04% in FY25 from 11.81% in FY24, indicating declining capital efficiency.

Logistics & Distribution

Distribution is impacted by infrastructural blocks and lengthy transportation times, which are cited as major curbs to rapid development in the industry.

📈 Strategic Growth

Expected Growth Rate

12-13%

Growth Strategy

Growth will be pursued through corporate rebranding (changing name to Scoobee Day Garments), setting up a Private Industrial Park in Kerala, and leveraging the 'China plus one' policy to capture international retail orders. The company also aims to benefit from zero-duty exports to Australia and the UAE.

Products & Services

Premium quality knitwear for infants and children, readymade garments, and Aluminium/Galvanized Iron roofing sheets and accessories.

Brand Portfolio

Scoobee Day, Anna, and Kitex (legacy group brands).

New Products/Services

The company is exploring technical textiles, a market in India expected to grow at a 9% GVA rate, and has recently operationalized a new knitting unit to internalize production.

Market Expansion

Targeting zero-duty markets in Europe, Canada, the UK, and GCC countries following new trade agreements. The company is also expanding its domestic footprint through the proposed industrial park in Kerala.

Strategic Alliances

The company relies heavily on its parent group (Anna-Kitex) for need-based funding and order support when external customer demand decreases.

🌍 External Factors

Industry Trends

The Indian textile industry is expected to reach USD 350 billion by 2030. Trends include a shift toward technical textiles and the growth of E-commerce, which the company plans to leverage for its garment division.

Competitive Landscape

Intense competition from both organized and unorganized players in India, as well as international competition from China, Bangladesh, Vietnam, and Italy.

Competitive Moat

The primary moat is the 'Anna-Kitex' legacy and promoter support, providing access to unsecured loans and group-level orders. However, this is weakened by a lack of product differentiation and low R&D.

Macro Economic Sensitivity

Highly sensitive to global economic growth; a slowdown has led to international retailers reporting high inventory and reducing off-take from suppliers like SDGIL.

Consumer Behavior

Shift toward premium quality knitwear for infants and children, which currently aids the company's operating margins despite the overall revenue slump.

Geopolitical Risks

Beneficiary of the 'China plus one' policy as global retailers seek alternate supply bases. However, it faces competition from regional trade blocs and bilateral agreements involving other nations.

⚖️ Regulatory & Governance

Industry Regulations

Operations are influenced by the PLI Scheme (INR 10,683 Cr allocation) and the MITRA Park scheme, which aim to modernize textile machinery and infrastructure.

Taxation Policy Impact

The company benefits from the RoDTEP scheme, which refunds central, state, and local duties/taxes on exported products, positively impacting cash flows.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 'Stretched' liquidity profile, evidenced by a Current Ratio of 0.36 and a DSCR of 0.76, making the company dependent on continuous promoter intervention.

Geographic Concentration Risk

Manufacturing is concentrated in Karur (Tamil Nadu) and Kizhakkambalam (Kerala), making it vulnerable to regional labor issues or infrastructural blocks in these specific hubs.

Third Party Dependencies

High dependency on group companies for both financial liquidity (unsecured loans) and revenue (orders during demand slumps).

Technology Obsolescence Risk

Risk is high due to the acknowledged lack of product development and innovation centers, which may lead to a loss of competitiveness against technologically advanced international peers.

Credit & Counterparty Risk

Trade receivables turnover ratio slowed significantly to 10.92 in FY25 from 43.07 in FY24, indicating a potential deterioration in the quality or collection speed of receivables.