DIGJAMLMTD - Digjam

📊 NSE: DIGJAMLMTD 🏢 Textiles - Products 📅 Last Updated: 12/13/2025 21:34

💰 Financial Performance

Revenue Growth by Segment

Total operating income for the worsted fabrics segment declined by 92.05% from INR 11.19 Cr in FY19 to INR 0.89 Cr in FY20, following a 81.6% decline from INR 60.46 Cr in FY18.

Geographic Revenue Split

100% of manufacturing operations are concentrated at the sole facility in Jamnagar, Gujarat; specific geographic sales split is not disclosed in available documents.

Profitability Margins

Net margins are deeply negative; the company reported a PAT loss of INR 17.58 Cr in FY20 and INR 44.36 Cr in FY19. For 9MFY19, the net loss was INR 29.72 Cr on an income of INR 7.04 Cr.

EBITDA Margin

PBILDT margin was negative at -1,561.8% in FY20 (INR -13.90 Cr on INR 0.89 Cr revenue) compared to -237.7% in FY19 (INR -26.60 Cr on INR 11.19 Cr revenue).

Capital Expenditure

Property, Plant and Equipment (PPE) decreased from INR 58.93 Cr in 2024 to INR 0.09 Cr in 2025, primarily due to the reclassification of INR 57.14 Cr as 'Non-Current Asset held for Sale'.

Credit Rating & Borrowing

The company carries a 'CARE D' (Single D) rating as of 2018, signifying default or expected default. Borrowing costs are not specified, but the company faced ongoing delays in servicing term loan principal and interest.

⚙️ Operational Drivers

Raw Materials

Worsted yarn and wool (implied by worsted fabric manufacturing); specific percentage of total cost is not disclosed in available documents.

Capacity Expansion

Current installed capacity is 5.50 million meters of worsted fabric at the Jamnagar facility; no expansion plans are detailed in the current reporting period.

Raw Material Costs

Not disclosed as a specific percentage of revenue for FY25; however, historical production was suspended due to the inability to fund working capital for procurement.

Manufacturing Efficiency

Capacity utilization is significantly low or zero during periods of production suspension; total operating income fell to just INR 0.89 Cr in FY20.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

The primary strategy is the merger with Reid & Taylor International Private Limited (RTIL). This aims to achieve business synergies, brand consolidation, and operational restructuring to exit the stressed financial state.

Products & Services

Worsted fabrics, fine suitings, and textile manufacturing services.

Brand Portfolio

Digjam, Reid & Taylor (via proposed merger).

Market Expansion

The company is focusing on the merger with RTIL to stabilize its market position in the premium suiting segment.

Strategic Alliances

Scheme of Arrangement with Reid & Taylor International Private Limited (RTIL) and oversight by the AFINQUEST Group.

🌍 External Factors

Industry Trends

The textile industry is seeing consolidation of legacy brands under new management groups (like AFINQUEST) to resolve insolvency and leverage established brand equity.

Competitive Landscape

Competes in the premium worsted suiting market; key dynamics involve high working capital requirements and brand-driven consumer demand.

Competitive Moat

The company's moat is its long-standing brand heritage (established 1948) and specialized manufacturing capacity for worsted fabrics, though this is currently weakened by financial distress.

Macro Economic Sensitivity

High sensitivity to credit availability and interest rates; the company's ability to operate is directly tied to its liquidity position.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to textile manufacturing standards and pollution norms; the company must comply with SEBI Listing Obligations (LODR) for its merger process.

Taxation Policy Impact

Current Tax Assets (Net) stood at INR 1.56 Lakhs in 2025, down from INR 60.51 Lakhs in 2024.

Legal Contingencies

The company underwent Corporate Insolvency Resolution Process (CIRP) initiated by NCLT Ahmedabad on April 26, 2019. It is currently processing a Scheme of Arrangement with RTIL which received a 'no adverse objection' from BSE in December 2025.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the successful implementation and integration of the RTIL merger, which will dilute public shareholding by approximately 78% (from 25% to 5.48%).

Geographic Concentration Risk

100% of manufacturing is concentrated in Jamnagar, Gujarat, creating high regional risk.

Third Party Dependencies

High dependency on financial institutions for working capital; production was previously suspended due to lack of liquidity.

Technology Obsolescence Risk

The company noted that while audit trails were not enabled in previous accounting software, they are now preserving records in accordance with statutory requirements.