💰 Financial Performance

Revenue Growth by Segment

Revenue from operations grew by 65.66% YoY to INR 9.49 Cr (948.75 lakhs) in FY25, primarily driven by the trading segment. Manufacturing revenue has dropped to 0% as the company stopped manufacturing operations and sold its plant and machinery.

Profitability Margins

Core operating margin (before exceptional items) was -13.87% in FY25, a significant decline from a positive margin in FY24. Net profit margin is highly skewed at 730.1% due to INR 69.60 Cr in exceptional income from asset sales.

EBITDA Margin

Operating profit before working capital changes was a loss of INR 70.94 Cr in FY25, compared to a loss of INR 27.15 Cr in FY24, representing a 161% increase in operating losses due to the cessation of manufacturing and high fixed costs relative to trading volume.

Capital Expenditure

Capital expenditure for FY25 was INR 2.75 Cr (275.15 lakhs), primarily related to the transition to trading activities, compared to INR 2.35 Cr in FY24.

Credit Rating & Borrowing

Current borrowings stood at INR 0.63 Cr (62.92 lakhs) as of March 31, 2025, up 139% from INR 0.26 Cr in FY24. Finance costs decreased by 67% YoY to INR 0.17 Cr (16.66 lakhs).

⚙️ Operational Drivers

Raw Materials

Stock-in-trade (textile products) represents 98.3% of the total operational revenue, as the company has pivoted from manufacturing to trading.

Capacity Expansion

Current manufacturing capacity is 0 MTPA as the company has sold off all plant and machinery. No planned expansion of manufacturing is mentioned; the focus is entirely on trading operations.

Raw Material Costs

Purchases of stock-in-trade for FY25 were INR 9.33 Cr (932.60 lakhs), accounting for 98.3% of revenue from operations, reflecting a low-margin trading model.

Manufacturing Efficiency

Manufacturing efficiency is no longer applicable as operations have ceased; the company is now evaluated on trading turnover and inventory cycles.

Logistics & Distribution

Other expenses, which include distribution and administrative costs, rose 129% YoY to INR 4.46 Cr (445.70 lakhs) in FY25.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

The company is transitioning from a manufacturing-based model to a trading-based model. Growth is expected to be achieved by leveraging the existing net worth of INR 157.84 Cr and cash balances to scale trading volumes in textile products and optimizing the cost structure after the sale of legacy manufacturing assets.

Products & Services

Trading of textile-related products and stock-in-trade.

Brand Portfolio

Soma Textiles

New Products/Services

New product launches are focused on expanded trading portfolios in the textile sector, though specific revenue contribution percentages are not disclosed.

Strategic Alliances

The company maintains a relationship with Soma Textiles FZC, an associate company, to which it has provided loans resulting in a foreign exchange gain of INR 1.12 Cr in FY25.

🌍 External Factors

Industry Trends

The textile industry is seeing a shift where legacy manufacturing units with high overheads are struggling, leading companies like Soma to pivot to asset-light trading models. The company's positioning is currently defensive, focusing on liquidity and debt clearance.

Competitive Landscape

Competes with other textile traders and organized wholesalers; the market is highly fragmented with low entry barriers for trading.

Competitive Moat

The company currently lacks a strong manufacturing moat. Its primary advantage is a strong liquidity position with a positive net worth of INR 157.84 Cr and minimal debt, providing a buffer for the business model transition.

Macro Economic Sensitivity

Highly sensitive to textile industry cycles and domestic demand for traded textile goods.

⚖️ Regulatory & Governance

Industry Regulations

Subject to textile trading regulations and GST compliance; manufacturing-related pollution norms are no longer applicable.

Legal Contingencies

The company has disclosed the impact of pending litigations in Note 39 of the financial statements; however, the specific INR value of these contingencies is not provided in the summary.

⚠️ Risk Analysis

Key Uncertainties

The primary risk is the 'Material Uncertainty Related to Going Concern' as identified by auditors, given the cessation of manufacturing and reliance on asset sales for profitability. This represents a 100% risk to the current business structure if trading operations do not become self-sustaining.

Third Party Dependencies

100% dependency on third-party manufacturers for all products sold under the trading model.

Technology Obsolescence Risk

Low risk for trading, but the company has already suffered from the obsolescence of its manufacturing plant, which led to its sale.

Credit & Counterparty Risk

Trade receivables stood at INR 1.31 Cr (130.56 lakhs) as of March 31, 2025, down from INR 0.17 Cr in the previous year, indicating a shift in credit terms for the trading business.