SHIVATEX - Shiva Texyarn

📊 NSE: SHIVATEX 🏢 Textiles - Cotton/Blended 📅 Last Updated: 12/14/2025 13:13

💰 Financial Performance

Revenue Growth by Segment

Standalone total income for Q2 FY26 reached INR 105.50 Cr, representing a 10.5% growth compared to INR 95.46 Cr in Q2 FY25. Technical textiles accounted for 23.3% of the top line in recent periods, while the spinning segment faced a 29% YoY decline in earlier quarters (Q1 FY24) before recovering.

Geographic Revenue Split

Not disclosed in available documents; however, the company operates primarily out of Coimbatore, Tamil Nadu, with a focus on domestic retail and defense segments.

Profitability Margins

Operating Profit Margin improved significantly by 206%, rising from 3.61% in FY24 to 11.05% in FY25. Net Profit Margin also saw a turnaround of 210%, moving from -3.31% in FY24 to 3.65% in FY25 due to higher profitability in the defense and technical textile segments.

EBITDA Margin

EBITDA margin for Q1 FY24 was negative at -0.29% (loss of INR 0.26 Cr), but the company has since improved performance. Credit rating agencies have set a target of maintaining PBILDT margins above 12% on a sustained basis for a positive rating action.

Capital Expenditure

Not disclosed in available documents, though credit rating sensitivities indicate that any large debt-funded capex leading to a gearing ratio above 1.5x would be viewed negatively.

Credit Rating & Borrowing

The company's outlook was revised from Negative to Stable by CARE Ratings. Key triggers for improvement include scaling operations beyond INR 500 Cr and maintaining a current ratio between 1.3x and 1.5x.

⚙️ Operational Drivers

Raw Materials

Cotton and yarn are the primary raw materials. Volatility in these prices is cited as a major constraint, directly impacting the spinning segment's profitability.

Import Sources

Not disclosed in available documents; however, the company is based in the textile hub of Coimbatore, Tamil Nadu.

Capacity Expansion

The company is transitioning its spinning division towards 'finer counts' to improve margins. Current capacity utilization is improving, particularly in the spinning division, though specific MTPA figures are not provided.

Raw Material Costs

Raw material expenses were INR 60.92 Cr against a total income of INR 90.16 Cr in Q1 FY24, representing approximately 67.5% of revenue. Margins remain highly exposed to price volatility in these inputs.

Manufacturing Efficiency

Efficiency is being driven by a shift toward high-margin defense orders and finer count patterns in the spinning division to offset rising manufacturing costs.

📈 Strategic Growth

Expected Growth Rate

37%

Growth Strategy

Growth is targeted through the scaling of operations to exceed INR 500 Cr revenue. The strategy involves increasing the contribution from the high-margin, order-based defense segment and recovering retail brands like QuickDry.

Products & Services

Cotton yarn (finer counts), Technical Textiles, Defense-grade textile products, and baby care products.

Brand Portfolio

QuickDry (retail brand) and Shiva Texyarn.

New Products/Services

Expansion into order-based high-margin defense textiles is expected to be a significant contributor to future revenue growth.

Market Expansion

The company is focusing on the recovery of its retail brands and expanding its footprint in the technical textiles market, which recently contributed 23.3% to the top line.

Strategic Alliances

The company has an associate relationship with L.K. Distributors Private Limited, whose results are included in the consolidated financial statements.

🌍 External Factors

Industry Trends

The textile industry is seeing a shift toward technical textiles and specialized defense applications. Shiva Texyarn is positioning itself by diversifying away from pure spinning into these higher-margin value-added segments.

Competitive Landscape

Competes with other textile mills in the Coimbatore region and national players in the technical textile and retail baby-care segments.

Competitive Moat

The company's moat is built on its long-standing presence since 1980 and its diversification into technical textiles and defense, which provides a buffer against the cyclicality of the spinning industry.

Macro Economic Sensitivity

Highly sensitive to textile industry cycles and cotton price inflation, which caused a net loss margin of -3.31% in FY24.

Consumer Behavior

Muted demand in retail markets has previously impacted the brand segment, but a recovery in consumer spending is expected to help brands like QuickDry.

Geopolitical Risks

Not disclosed in available documents; however, defense contracts may be influenced by national procurement policies.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The company maintains an adequate internal financial control system as of March 31, 2025.

Taxation Policy Impact

The company follows standard Indian corporate tax rates; specific effective tax rate percentages were not provided in the summary results.

Legal Contingencies

The company reported differences in quarterly returns filed with banks regarding stock and creditors due to provisions and cut-off procedures, though these did not adversely affect drawing power.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of raw material prices, which can cause EBITDA margins to fluctuate significantly (e.g., the 104% YoY drop in EBITDA in Q1 FY24).