PASHUPATI - Pashupati Cotsp.

📊 NSE: PASHUPATI 🏢 Textiles - Cotton/Blended 📅 Last Updated: 12/14/2025 10:54

💰 Financial Performance

Revenue Growth by Segment

Consolidated Profit Before Tax (PBT) grew by 16.74% YoY, reaching INR 853.58 Lakhs for the half-year ended September 30, 2025, compared to INR 731.15 Lakhs in the previous year. The subsidiary Pashupati Cotyarn LLP contributed a turnover of INR 12.43 Cr for FY25.

Geographic Revenue Split

The company operates primarily out of Kadi, Gujarat, leveraging the state's textile hub. While specific regional % splits are not disclosed, the 'Pashupati' brand maintains a presence in both domestic and international markets, benefiting from its strategic location near end-users.

Profitability Margins

Net Profit for the half-year ended September 30, 2024, was restated to INR 531.75 Lakhs under Ind AS. The subsidiary Pashupati Cotyarn LLP reported a Profit After Tax (PAT) of INR 14.41 Lakhs on a turnover of INR 12.43 Cr, representing a thin PAT margin of approximately 1.16%.

EBITDA Margin

Operating Profit Before Working Capital Changes stood at INR 1,855.28 Lakhs for H1 FY26, a 5.45% increase from INR 1,759.41 Lakhs YoY. This indicates stable core operational profitability despite fluctuations in the broader textile market.

Capital Expenditure

The company has no major capital expenditure plans in the near term. This lack of heavy investment allows for the preservation of cash, as evidenced by the projected gross cash accruals of INR 15.00 Cr to INR 24.00 Cr for the FY25-FY27 period.

Credit Rating & Borrowing

The company maintains a satisfactory liquidity buffer with average fund-based limit utilization at approximately 66%. Debt repayment obligations are projected between INR 1.57 Cr and INR 9.00 Cr for FY25-FY27, well-covered by expected cash accruals.

⚙️ Operational Drivers

Raw Materials

Raw cotton and cotton lint are the primary raw materials, accounting for the bulk of the cost of goods sold for its ginning and spinning operations.

Import Sources

Raw materials are primarily sourced from Gujarat, India, which is a leading cotton-producing state, ensuring proximity to the manufacturing facility in Kadi.

Key Suppliers

Specific supplier names are not disclosed, but the company sources from local ginners and cotton farmers within the Gujarat textile belt.

Capacity Expansion

Current capacity details in MT are not specified, but the company has evolved from a small ginning unit in 1993 to a multi-activity textile group. No major capacity expansion is planned for the immediate FY25-FY26 period.

Raw Material Costs

Raw material costs are highly sensitive to seasonal cotton yields. The company manages these costs through its strategic location in Kadi, which minimizes lead time and procurement logistics expenses.

Manufacturing Efficiency

Efficiency is driven by the strategic proximity of the plant to end-users in the textile value chain, allowing for rapid delivery and reduced transit losses.

Logistics & Distribution

Distribution costs are optimized by the plant's location in Kadi, which is central to various textile end-users, reducing the outward freight as a percentage of total revenue.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth is targeted through the stabilization of the 'Pashupati' brand in international markets and the optimization of the operating cycle. The company is transitioning from high-debt growth to a model funded by internal accruals, with projected accruals rising to INR 24 Cr by FY27.

Products & Services

The company produces cotton yarn and provides cotton ginning services. It also manages infrastructure through LLPs like Sarjak Infra LLP.

Brand Portfolio

Pashupati

New Products/Services

The company is focusing on higher-value textile-related activities, though specific new product names and their % revenue contribution are not currently disclosed.

Market Expansion

Expansion is focused on deepening the domestic footprint in the Gujarat textile association network and increasing export volumes for cotton yarn.

Market Share & Ranking

The company is a established player in the Gujarat cotton segment; however, specific market share percentage and industry ranking are not provided.

Strategic Alliances

The company operates through subsidiaries including Pashupati Cotyarn LLP (99% shareholding) and Sarjak Infra LLP to diversify its operational base.

🌍 External Factors

Industry Trends

The textile industry is shifting toward integrated value chains. Pashupati is positioning itself by maintaining a lean operating cycle (47 days) to remain competitive against larger, integrated players.

Competitive Landscape

The company competes with numerous organized and unorganized ginning and spinning units in the Gujarat region.

Competitive Moat

The moat is built on the 20+ years of experience of Mr. Saurin Parikh and the strategic location in Kadi. This cost leadership through logistics and procurement efficiency is sustainable as long as Gujarat remains a cotton hub.

Macro Economic Sensitivity

Highly sensitive to agricultural output and monsoon patterns in India, which dictate raw cotton availability and pricing.

Consumer Behavior

Increased demand for sustainable and high-quality cotton yarn in the global apparel industry is driving the company's focus on quality standards.

Geopolitical Risks

Trade barriers on textile exports or changes in import duties on cotton in target international markets could impact the 16.74% PBT growth trend.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Ministry of Textiles and local Gujarat state industrial policies, including cotton procurement norms and export-import (EXIM) regulations.

Environmental Compliance

The company must adhere to pollution control norms for textile units in Gujarat; specific ESG compliance costs in INR are not disclosed.

Taxation Policy Impact

The company transitioned to Ind AS effective April 1, 2025. Deferred tax adjustments for the half-year ended September 30, 2024, amounted to INR 83.85 Lakhs.

Legal Contingencies

The company reported the resignation of Mrs. Bijal Kaivan Thakkar as Company Secretary and the subsequent appointment of a new KMP to ensure regulatory compliance. No major pending court case values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw cotton prices poses a risk to the projected INR 15-24 Cr cash accruals. A 5% fluctuation in raw material costs can significantly impact the 1.16% PAT margin of subsidiaries.

Geographic Concentration Risk

High geographic concentration with 100% of manufacturing assets located in Kadi, Gujarat.

Third Party Dependencies

Dependency on the Gujarat cotton farming community for raw material supply; no single supplier is named as dominant.

Technology Obsolescence Risk

The spinning industry requires periodic machinery upgrades to maintain yarn quality; the absence of major capex plans may pose a long-term technology risk.