LEMERITE - Le Merite Export

📊 NSE: LEMERITE 🏢 Trading 📅 Last Updated: 12/14/2025 9:14

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for H1 FY26 was INR 208.68 Cr, representing a 29.68% decline from INR 296.77 Cr in H1 FY25. The manufacturing segment accounts for 35% of total sales and experienced losses in FY24 due to commodity price fluctuations.

Profitability Margins

Operating margins declined to 1.4% in FY24 from 2.8% in FY23. Net profit margin for H1 FY26 improved to 4.14% compared to 1.22% in H1 FY25, driven by the clearance of high-priced inventory.

EBITDA Margin

Operating margins stood at 1.4% in FY24, a 50% reduction YoY from 2.8% in FY23, primarily due to losses in the manufacturing division.

Capital Expenditure

The company is currently evaluating setting up a new manufacturing unit to expand current capacities; specific INR values for this planned debt-funded expansion are not disclosed.

Credit Rating & Borrowing

CRISIL reaffirmed the rating at 'CRISIL BBB-' but revised the outlook to 'Negative' from 'Stable' in 2024. The company maintains limited dependence on external borrowings with a gearing ratio of 0.92 times as of March 31, 2024.

⚙️ Operational Drivers

Raw Materials

Cotton yarn is the primary raw material, representing a significant portion of the cost structure for the 35% manufacturing segment.

Capacity Expansion

The company is evaluating a new manufacturing unit to expand its current capacity; current installed capacity in MT is not disclosed.

Raw Material Costs

Raw material costs are highly sensitive to cotton yarn price fluctuations, which caused manufacturing losses in FY24. 80-90% of higher-priced inventory was cleared by FY25 to stabilize margins.

Manufacturing Efficiency

Manufacturing segment was loss-making in FY24 due to high inventory costs and lower realizations.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is targeted through the migration from the NSE SME Emerge platform to the Main Board (approved Dec 2025), expansion of manufacturing capacity via a new unit, and margin stabilization by clearing high-cost inventory.

Products & Services

Cotton yarn and manufactured textile products.

Brand Portfolio

Le Merite.

Market Expansion

Migration to the NSE Main Board in December 2025 to increase market visibility and access to capital.

🌍 External Factors

Industry Trends

The industry is facing subdued profitability due to commodity volatility, but the company is positioning for a revival in FY25 through capacity expansion and migration to the Main Board.

Competitive Moat

Moat is derived from the extensive experience of the promoters in the textile export business and a comfortable capital structure with a net worth of INR 96 Cr.

Macro Economic Sensitivity

Highly sensitive to global commodity cycles, specifically cotton yarn prices.

⚖️ Regulatory & Governance

Industry Regulations

Migration from SME Emerge to the NSE Main Board requires compliance with broader SEBI (LODR) regulations; the company transitioned to Ind AS reporting in FY25.

Environmental Compliance

The company maintains a CSR policy and has implemented a 'Green Initiative' for paperless electronic compliance.

Taxation Policy Impact

The company transitioned to Ind AS on April 1, 2024, which resulted in deferred tax charges to reserves.

Legal Contingencies

The stock exchange noted a delayed appointment of the Company Secretary and Compliance Officer, which has since been corrected with the appointment of Arpit Sharma.