RSWM - RSWM Ltd

📊 NSE: RSWM 🏢 Textiles - Cotton/Blended 📅 Last Updated: 12/14/2025 12:29

💰 Financial Performance

Revenue Growth by Segment

Overall revenue for H1 FY26 was ₹2,319 Cr, a decline of 2.3% YoY from ₹2,374 Cr. The decline was primarily driven by lower capacity utilization in the mélange and knit business segments. Q2 FY26 revenue stood at ₹1,150 Cr, down 1.4% YoY and 1.6% QoQ.

Geographic Revenue Split

Not disclosed in available documents, though the company notes a balance between domestic demand (boosted by GST rationalization) and export diversification to mitigate global headwinds.

Profitability Margins

Gross margins expanded to 37.8% in H1 FY26 (up 173 bps YoY) and reached 38.4% in Q2 FY26 (up 195 bps YoY). This improvement was driven by lower raw material costs and a shift toward a more profitable product mix. PAT margin remained stable at 0.5% for Q2 FY26.

EBITDA Margin

EBITDA margin for H1 FY26 was 6.8%, representing a 280 bps gain YoY. Absolute EBITDA for H1 FY26 rose 66.1% to ₹160 Cr. Q2 FY26 EBITDA grew 85.6% YoY to ₹79 Cr (6.8% margin) due to operational efficiencies and disciplined cost management.

Capital Expenditure

Capital Work in Progress (CWIP) stood at ₹46.10 Cr as of September 30, 2025, compared to ₹30.97 Cr in FY25, indicating ongoing investments in facilities. Property, Plant & Equipment (PPE) is valued at ₹1,380.86 Cr.

Credit Rating & Borrowing

Finance costs declined 11.5% YoY and 8.9% QoQ to ₹30.6 Cr in Q2 FY26. This was achieved through a reduction in total debt and lower interest rates. Total non-current borrowings stood at ₹484.61 Cr, while short-term borrowings were ₹947.66 Cr as of H1 FY26.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include cotton, synthetic fibers, and green fiber. Lower raw material costs were a primary driver for the 195 bps expansion in gross margins during Q2 FY26.

Capacity Expansion

Current installed capacity is not specified in units, but the company reported lower capacity utilization in the mélange and knit businesses during Q2 and H1 FY26, which negatively impacted revenue.

Raw Material Costs

Gross profit rose 2.7% YoY to ₹885 Cr in H1 FY26 despite lower revenue, indicating that raw material costs as a percentage of revenue decreased, leading to a margin of 37.8%.

Manufacturing Efficiency

Operational efficiency and disciplined cost management contributed to a 318 bps YoY expansion in EBITDA margins for Q2 FY26.

📈 Strategic Growth

Growth Strategy

Growth will be driven by the 'RSWM 2.0' transformation plan, which focuses on a three-year roadmap for cost optimization, improving product and market mix through new territories, and leveraging technology and automation. The company is also monetizing non-operating assets to fund these initiatives.

Products & Services

Synthetic yarn, blended yarn, mélange yarn, cotton yarn, specialty and value-added yarns, denim fabric, synthetic fabric, and green fiber.

Brand Portfolio

LNJ Bhilwara Group (Parent), RSWM 2.0 (Strategic Initiative).

New Products/Services

The company is exploring new territories and brands under RSWM 2.0 to improve the overall market mix.

Market Expansion

Focusing on new territories and expanding the global presence to capture emerging growth opportunities.

Market Share & Ranking

RSWM is described as one of the largest textile manufacturing companies in India.

Strategic Alliances

LNJ Skills & Rozgar Private Limited (Associate - 47.30% ownership) and BG Wind Power Limited (Subsidiary - 100% ownership).

🌍 External Factors

Industry Trends

The industry is seeing a shift toward value-added yarns and technical textiles. RSWM is positioning itself through automation and 'RSWM 2.0' to remain competitive amidst global volatility.

Competitive Landscape

Competes in the global and domestic textile markets for yarns and fabrics; specific competitor names were not listed.

Competitive Moat

Moat is built on a well-diversified product portfolio across 6 segments, large-scale manufacturing facilities, and a strong parentage (LNJ Bhilwara Group). Sustainability is driven by the transition to 'green fiber' and operational agility.

Macro Economic Sensitivity

Highly sensitive to global economic conditions and domestic consumption trends. Domestic demand is currently supported by GST rationalization.

Consumer Behavior

Steady domestic consumption is supporting demand for suitings, shirtings, and denim.

Geopolitical Risks

Global headwinds and economic uncertainty are cited as factors causing a slight decline in revenue and impacting export diversification.

⚖️ Regulatory & Governance

Industry Regulations

Operations are influenced by GST rationalization and SEBI (LODR) Regulations for financial reporting.

Environmental Compliance

The company produces 'green fiber' and utilizes wind power (20 MW) to meet sustainability goals.

Taxation Policy Impact

Deferred tax liability stood at ₹66.55 Cr as of H1 FY26.

⚠️ Risk Analysis

Key Uncertainties

Global economic uncertainty and its impact on export demand; potential for continued low capacity utilization in the mélange and knit segments in Q3 FY26.