RELCHEMQ - Rel. Chemotex

📊 NSE: RELCHEMQ 🏢 Textiles - Spinning - Synthetic / Blended 📅 Last Updated: 12/14/2025 11:46

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations grew 4.19% YoY to INR 191.89 Cr in H1 FY26 from INR 184.17 Cr in H1 FY25. Segment-specific growth is not detailed, but the company focuses on synthetic blended yarns and technical textiles.

Geographic Revenue Split

Not disclosed in available documents, though the company notes a focus on both export sales and revitalizing sales in the domestic Indian market.

Profitability Margins

Operating profit margin stood at 7.74% in FY24, up from 6.78% in FY23. Net profit margin improved to 1.13% in FY24 from 0.86% in FY23, primarily aided by deferred tax adjustments despite geopolitical pressures.

EBITDA Margin

OPBDITA/OI margin was 9.5% in FY24, a decline from 10.9% in FY23. This contraction reflects higher operating costs and adverse market situations despite a slight revenue increase.

Capital Expenditure

The company completed expansion projects totaling approximately INR 130 Cr, which added 13,440 spindles to its capacity. Capital Work in Progress stood at INR 0.81 Cr as of September 30, 2025.

Credit Rating & Borrowing

The company was rated [CRISIL]B(Stable)/[CRISIL]A4; ISSUER NOT COOPERATING as of September 30, 2024. Interest coverage ratio declined significantly from 2.90x in FY23 to 1.81x in FY24 due to higher interest rates and lower profitability.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Polyester, Viscose, and Acrylic fiber. Raw material consumption of INR 94.93 Cr represented 49.4% of total revenue in H1 FY26.

Import Sources

Primarily sourced from the domestic Indian market to support manufacturing units in Udaipur, Rajasthan.

Key Suppliers

Key suppliers include Reliance Industries Limited for polyester staple fiber and Grasim Industries Limited for viscose staple fiber.

Capacity Expansion

Current capacity was expanded by 13,440 spindles, representing a ~25% increase in total capacity. The expansion also included modernizing and expanding dyeing facilities.

Raw Material Costs

Raw material costs were INR 94.93 Cr in H1 FY26, a slight decrease of 2.4% from INR 97.27 Cr in H1 FY25, suggesting improved procurement or mix despite revenue growth.

Manufacturing Efficiency

Focus on 'value-added' product offerings and strategic cost-reduction efforts spearheaded by executive leadership.

Logistics & Distribution

Not disclosed as a specific percentage, but the company manages exports and domestic distribution from its Rajasthan unit.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Growth is driven by a 25% capacity expansion (13,440 spindles) and diversification into technical, industrial, and medical textiles. The company is also focusing on R&D to expand value-added product offerings and revitalizing domestic sales while maintaining export momentum.

Products & Services

Synthetic blended yarns, technical textiles, industrial textiles, medical textiles, and dyed yarns.

Brand Portfolio

Reliance Chemotex Industries Limited (RCIL).

New Products/Services

Diversification into technical and medical textiles is expected to contribute to higher-margin revenue streams, though specific % contribution is not disclosed.

Market Expansion

Focus on expanding the value-added product portfolio in both domestic and international export markets.

🌍 External Factors

Industry Trends

The textile industry is facing challenges from high interest rates and fluctuating raw material costs. The trend is shifting toward technical and medical textiles where RCIL is positioning itself for future growth.

Competitive Landscape

Competes in the fragmented synthetic yarn and textile market; key competitors are not named but include other large-scale spinning mills.

Competitive Moat

Moat is built on specialized manufacturing processes (Toyota Production System) and a niche focus on technical/industrial textiles, which are more durable than standard apparel yarns.

Macro Economic Sensitivity

Highly sensitive to global demand and the Indian economy's GDP growth (6.5% in FY25). Geopolitical situations are cited as a reason for recent profit pressure.

Consumer Behavior

Shift toward technical and medical textiles is driving the company's product diversification strategy.

Geopolitical Risks

Uncertainties such as US investment policies and global supply chain disruptions impact export demand and raw material pricing.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to government import/export policies and textile industry regulations; the company monitors these as part of its regulatory risk management.

Taxation Policy Impact

The company benefited from deferred tax credits, which increased the net profit margin despite lower operating profits. Current tax for H1 FY26 was INR 0.38 Cr.

Legal Contingencies

The Audit Committee reviews 'substantial defaults' in payments to creditors/depositors, though no specific pending court case values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Fluctuations in petroleum prices (raw material link), interest rate volatility (impacting debt servicing), and geopolitical shifts affecting export markets.