MODTHREAD - Modern Threads

📊 NSE: MODTHREAD 🏢 Textiles - Spinning - Synthetic / Blended 📅 Last Updated: 12/14/2025 9:55

💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations decreased by 13.46% YoY, falling from INR 300.49 Cr in FY24 to INR 260.04 Cr in FY25. Segment-specific growth percentages were not disclosed in the available documents.

Profitability Margins

The adjusted net profit margin for the period ending September 30, 2025, was approximately 1.61% (INR 2.45 Cr profit on INR 151.66 Cr income). Reported net profit for the same period was INR 2.63 Cr, but was adjusted downward to INR 2.45 Cr due to audit qualifications.

EBITDA Margin

Not explicitly stated, but Profit Before Tax (PBT) for the half-year ended September 30, 2025, was INR 3.74 Cr. Total income for FY25 was INR 269.89 Cr, down 11.24% from INR 304.08 Cr in FY24.

Capital Expenditure

The company incurred capital expenditure of INR 8.32 Cr in FY25 for Property, Plant, and Equipment, compared to INR 10.42 Cr in FY24. Capital work-in-progress increased from INR 2.20 Cr to INR 5.01 Cr YoY.

Credit Rating & Borrowing

The company has sanctioned working capital limits exceeding INR 5 Cr from UCO Bank. Specific credit ratings and interest rate percentages were not disclosed.

⚙️ Operational Drivers

Raw Materials

Wool and threads (implied by company name and website). Cost of materials consumed was INR 150.52 Cr in FY25, representing 57.88% of total revenue from operations.

Raw Material Costs

Raw material costs decreased by 12.28% YoY from INR 171.59 Cr in FY24 to INR 150.52 Cr in FY25, largely tracking the 13.46% decline in revenue.

📈 Strategic Growth

Growth Strategy

The company is focusing on maintaining its presence in the woolen and thread markets, though specific strategic expansion plans were not detailed. The company actively trades in derivative financial instruments (equity, currency, and commodity) to manage financial risks or generate additional income.

Products & Services

Woolen threads, yarn, and related textile products.

Brand Portfolio

Modern Woollens, Modern Threads.

🌍 External Factors

Industry Trends

The textile and woolen industry is evolving with a focus on compliance and internal controls. Modern Threads is currently addressing material weaknesses in its financial reporting processes to align with industry standards.

Competitive Moat

The company relies on its established brand 'Modern Woollens' and its long-standing presence in the Bhilwara textile hub, though its competitive advantage is currently pressured by declining revenues and internal control issues.

Macro Economic Sensitivity

The company is sensitive to fluctuations in the textile industry and commodity prices due to its active derivative trading in commodities.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with the Companies Act, 2013, and SEBI (LODR) Regulations, 2015. It is required to file quarterly returns with UCO Bank for its working capital limits.

Taxation Policy Impact

The company did not recognize Deferred Tax Assets because it is not probable that future taxable profits will be available to utilize them, indicating a cautious outlook on future profitability.

Legal Contingencies

The company has a significant pending liability for unprovided interest/dividends on cumulative redeemable preference shares amounting to INR 10.66 Cr as of September 30, 2025.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the material weakness in internal financial controls regarding the confirmation of trade receivables and payables, which could lead to material misstatements in financial reporting.

Geographic Concentration Risk

Operations are concentrated in Bhilwara, Rajasthan.

Third Party Dependencies

Dependency on UCO Bank for working capital limits exceeding INR 5 Cr.

Technology Obsolescence Risk

The company uses accounting software with audit trail features, but the effectiveness of digital controls is currently under review due to identified material weaknesses.