💰 Financial Performance

Revenue Growth by Segment

Total income grew 12.2% QoQ to INR 347.4 Cr in Q2 FY26. The garment division grew 7% sequentially to INR 80 Cr and 13% YoY for the first 6 months to INR 155 Cr. Technical fabrics contribute approximately INR 8-10 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the company exports to the US indirectly through Vietnam, Bangladesh, Sri Lanka, Jordan, and Egypt to mitigate tariffs.

Profitability Margins

Gross margins remained strong and consistently above 50% during both the half-year and Q2 FY26, driven by product mix optimization.

EBITDA Margin

Not disclosed in available documents, but profitability levels were maintained despite increased inventory and debtor costs.

Capital Expenditure

Debt increased by INR 52.7 Cr (11.5%) to over INR 500 Cr to support modernization and increased working capital. Modernization exercise is nearing completion.

Credit Rating & Borrowing

Total debt stands above INR 500 Cr, having increased 11.5% YoY. Interest rate % not disclosed.

⚙️ Operational Drivers

Raw Materials

FR (Flame Retardant) based yarns and technical fabrics.

Capacity Expansion

Current capacity utilization is 77% overall and 78% in the garment division. The company has the ability to hit INR 1,800 Cr revenue without significant additional CAPEX. The Surat facility is expected to restart in Q1 FY27.

Manufacturing Efficiency

Capacity utilization improved to 77% in the recent quarter; garment division utilization is at 78%.

📈 Strategic Growth

Expected Growth Rate

13-15%

Growth Strategy

Achieving growth by reaching the INR 1,800 Cr revenue capacity (up from INR 1,400 Cr projected for the current year), restarting the Surat garmenting facility in Q1 FY27, focusing on technical fabrics, and diversifying into alternative international markets beyond the US.

Products & Services

Yarn, fabric, garments, and technical fabrics (including FR based yarns).

New Products/Services

Technical fabrics and FR (Flame Retardant) based yarns/fabrics currently contributing INR 8-10 Cr.

Market Expansion

Focusing on alternative markets to the USA and expanding the technical fabric division.

🌍 External Factors

Industry Trends

The industry is characterized by high capital costs and complex operations, creating strong entry barriers. Demand is expected to revive as Chinese competition decreases.

Competitive Landscape

Peers include Siyaram and Raymond, who also utilize specialized in-house capacities and outside job-work for bulk volumes.

Competitive Moat

Moat is built on operational complexity, high capital entry barriers, and long-standing client relationships.

Geopolitical Risks

US tariff policies and the shifting interest of Chinese players in the textile market are key factors.

⚖️ Regulatory & Governance

Industry Regulations

The company opted not to participate in the government's PLI scheme for fabric due to sufficient existing and job-work capacity.

⚠️ Risk Analysis

Key Uncertainties

Timing of global demand revival and potential changes in international trade tariffs.

Geographic Concentration Risk

Significant indirect exposure to the US market through third-party garment-making nations.

Third Party Dependencies

Reliance on job workers for bulk volume production to maintain better ROI.

Technology Obsolescence Risk

Ongoing modernization exercise to mitigate technology risks.

Credit & Counterparty Risk

Debtors increased due to extended credit terms; however, management states bad debts are being controlled well.