💰 Financial Performance

Revenue Growth by Segment

100% of revenue is derived from the manufacturing segment. Total revenue for FY 2024-25 was INR 167.77 Cr, representing a 15.95% decline from INR 199.61 Cr in FY 2023-24.

Geographic Revenue Split

Not disclosed in exact percentages, but the company exports bleached and surgical cotton to Europe and the USA, enabled by GOTS and GMP certifications.

Profitability Margins

Net profit margin for FY 2024-25 was 3.53% (INR 5.93 Cr), a decrease from 5.39% (INR 10.75 Cr) in FY 2023-24. The decline is attributed to lower operational revenue and higher other expenses.

EBITDA Margin

EBITDA margin for FY 2024-25 stood at 9.81% (INR 16.46 Cr), down from 11.00% (INR 21.95 Cr) in FY 2023-24, reflecting a 25.03% YoY decline in core operating profitability.

Capital Expenditure

The company invested INR 6.79 Cr in the purchase of fixed assets including Capital Work-in-Progress (CWIP) during the half-year ended September 30, 2025.

Credit Rating & Borrowing

CARE Ratings reviewed the company based on best available information due to non-cooperation. Overall gearing improved to 0.22x in FY 2023-24 from 0.31x in FY 2022-23.

⚙️ Operational Drivers

Raw Materials

Cotton (raw cotton and cotton fibers) is the primary raw material, used for processing into surgical and bleached cotton products.

Import Sources

Raw materials are primarily sourced domestically from Gujarat (Gondal) and Madhya Pradesh (Pithampur), where the company operates processing units.

Capacity Expansion

Current annual output capacity is 10,800 tonnes of bleached cotton and 2,400 tonnes of surgical cotton products.

Raw Material Costs

Raw material costs are managed through a strategic stocking policy and continuous monitoring of cotton prices to mitigate inflation risks.

Manufacturing Efficiency

The company utilizes integrated units in Gondal and Pithampur to process cotton from raw form to final surgical products, enhancing value-chain efficiency.

Logistics & Distribution

Export selling expenses for FY 2024-25 were INR 15.66 Cr, representing approximately 9.33% of total revenue.

📈 Strategic Growth

Growth Strategy

Growth is targeted through increasing capacity utilization of the 10,800-tonne bleached cotton facility and expanding export reach in Europe and the USA by maintaining GOTS and GMP certifications.

Products & Services

Surgical cotton, bleached cotton, absorbent cotton, and various surgical cotton products.

Brand Portfolio

Mohini.

Market Expansion

Focusing on high-margin export markets in Europe and the USA through regulatory compliance and quality certifications.

🌍 External Factors

Industry Trends

The industry is shifting toward certified organic and medical-grade hygiene products; MHHL is positioned with GOTS and GMP certifications to capture this growth.

Competitive Landscape

Faces competition from low-cost international imports and domestic cotton processors.

Competitive Moat

Moat is built on stringent certifications (GOTS, GMP) and integrated manufacturing, which are difficult for new entrants to replicate quickly for export markets.

Macro Economic Sensitivity

Sensitive to global cotton price cycles and international trade policies affecting textile exports.

Consumer Behavior

Increased global focus on hygiene and safe medical textiles is driving demand for certified absorbent cotton.

Geopolitical Risks

Trade barriers or regulatory changes in Europe and the USA could impact the 100% manufacturing-based export revenue.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by Good Manufacturing Practice (GMP) standards and European/USA regulatory bodies for surgical cotton exports.

Environmental Compliance

Compliant with Global Organic Textile Standard (GOTS) for organic fiber processing.

Taxation Policy Impact

Current tax expense for FY 2024-25 was INR 3.06 Cr, with an effective tax rate of approximately 34% on PBT of INR 8.56 Cr.

Legal Contingencies

The company is managing claims and recovery processes related to a major fire incident that occurred on May 24, 2021, at its Pithampur facility.

⚠️ Risk Analysis

Key Uncertainties

Forex volatility is a major uncertainty, evidenced by the INR 10.99 Cr notional loss on forward contracts. Raw material price fluctuations also impact margins by up to 10-15%.

Geographic Concentration Risk

Manufacturing is concentrated in Madhya Pradesh and Gujarat, making it vulnerable to regional industrial policies or localized disruptions.

Third Party Dependencies

Dependent on cotton farmers and traders in the Gujarat and MP belts for raw material procurement.

Technology Obsolescence Risk

Risk is mitigated by constant innovation in surgical cotton processing and maintaining high-tech bleached cotton lines.

Credit & Counterparty Risk

Trade receivables stood at INR 36.44 Cr as of September 30, 2025, with management focusing on strengthening relationships to ensure timely collections.