💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations declined by 91.22% YoY from INR 374.27 Cr in FY 2023-24 to INR 32.87 Cr in FY 2024-25. Segment-wise: Yarn revenue fell 93.96% (from INR 312.65 Cr to INR 18.89 Cr), Terry Towel revenue dropped 98.89% (from INR 30.80 Cr to INR 0.34 Cr), and Garments fell 83.44% (from INR 0.09 Cr to INR 0.015 Cr). Conversely, Job Work revenue grew 692.49% from INR 1.54 Cr to INR 12.24 Cr as the company pivoted its business model.

Profitability Margins

Net Profit Margin worsened significantly from -51.55% in FY 2023-24 to -397.70% in FY 2024-25. This 671.48% variance in margin is primarily due to the massive 91% drop in revenue while fixed costs like power and wages remained high under the job work model.

EBITDA Margin

The company reported a sustained operating loss. Return on Capital Employed (ROCE) was -0.13% in FY 2024-25 compared to -0.16% in FY 2023-24, reflecting continued negative core profitability despite a slight 18.75% improvement in the ratio due to reduced net losses.

Capital Expenditure

No new investments were made in subsidiaries or other entities during FY 2024-25. The company is currently constrained by liquidity, preventing capacity enhancement or significant capital outlays.

Credit Rating & Borrowing

Credit rating agencies are reluctant to assign ratings because redundant charges continue to appear in MCA records. The company's name remains on CIBIL and fraud lists despite the implementation of a resolution plan, which has severely restricted access to LC discounting and working capital limits.

⚙️ Operational Drivers

Raw Materials

The company has shifted to a job work model, which effectively eliminated direct raw material costs (0% of revenue) as the company now processes materials provided by clients rather than purchasing its own.

Import Sources

Not disclosed in available documents due to the shift to a job work model where clients provide materials.

Capacity Expansion

Current capacity enhancement is restrained by systemic risks and liquidity issues. The company operates textile units for Yarn, Terry Towels, and Garments, but some plants were shut down or partially restored during the year.

Raw Material Costs

Raw material costs were eliminated in FY 2024-25 due to the transition to a 100% job work model, intended to mitigate the lack of working capital for procurement.

Manufacturing Efficiency

Efficiency is hampered by potential impairment of outdated machinery and technology. Depreciation is currently charged over a 30-year useful life, but management suggests revaluation is needed to align with market realities.

📈 Strategic Growth

Expected Growth Rate

Not disclosed%

Growth Strategy

The company aims to restore operations by resolving liquidity issues and addressing systemic risks like the CIBIL fraud list status. The strategy focuses on the job work model to maintain some level of capacity utilization without the burden of raw material costs, while seeking to clear redundant charges on MCA records to regain credit access.

Products & Services

Yarn, Terry Towels, Garments, Knitted Cloth, and Textile Job Work services.

Brand Portfolio

SEL

New Products/Services

No new product launches were reported; the focus has shifted from product sales to 'Sale of Services' via job work.

Strategic Alliances

The company was taken over in March 2021 by a Consortium of Arr Ess Industries Private Limited and Leading Edge Commercial FZE following a Resolution Plan approved by NCLT.

🌍 External Factors

Industry Trends

The Indian textile industry is the world's second-largest producer, but is currently facing a 'tough situation of liquidity' and manpower shortages. The industry is shifting toward more sophisticated equipment and design capabilities to remain competitive.

Competitive Landscape

The company is losing ground to competitors due to its inability to recruit talented personnel in Marketing, HR, and Operations because of its financial standing.

Competitive Moat

The company lacks a sustainable moat currently due to its negative net worth and 'Corporate Debtor' status. Its previous scale in Yarn and Terry Towels has been neutralized by the inability to fund operations.

Macro Economic Sensitivity

Highly sensitive to manpower availability and liquidity. Manpower shortages in the last financial year forced factory closures across the Indian textile industry.

Geopolitical Risks

The company is subject to global business dynamics across various geographical markets in the textile sector, though specific trade barrier impacts were not detailed.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Insolvency and Bankruptcy Code (IBC) 2016 following the Section 7 application by State Bank of India. The company must also comply with SEBI (LODR) Regulations 2015.

Legal Contingencies

The company underwent a Corporate Insolvency Resolution Process (CIRP). While the resolution plan was implemented in 2021, 'redundant charges' still appear in MCA records. No new legal cases were filed against erstwhile promoters during the year that impact current operations.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the ability to remove the company from CIBIL/fraud lists; failure to do so will continue to block the 90% of revenue previously derived from owned-material production.

Third Party Dependencies

High dependency on the Consortium (Arr Ess Industries and Leading Edge Commercial FZE) for management and strategic direction following the IBC process.

Technology Obsolescence Risk

High risk of technology obsolescence in closed units; management noted potential impairment losses related to outdated machinery that may no longer be technologically relevant.

Credit & Counterparty Risk

Receivables quality is under pressure as the company loses the confidence of customers and suppliers due to its financial history.