💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations for FY 2024-25 was INR 284.98 Cr, representing a 23.11% decline from INR 370.64 Cr in FY 2023-24. This decrease was primarily driven by the closure of the Bathinda manufacturing unit and irregular operations at other sites.

Geographic Revenue Split

Not specifically disclosed in available documents, though the company operates production facilities in Punjab and Himachal Pradesh, India.

Profitability Margins

The company achieved a significant turnaround in FY 2024-25 with an Operating Profit Margin of 10.18% compared to -6.32% in FY 2023-24. Net Profit Margin also improved to 5.33% from -7.31% in the previous year, reflecting better cost management despite lower volumes.

EBITDA Margin

Operating Profit Margin stood at 10.18% in FY 2024-25, a recovery of 16.5 percentage points YoY. For the quarter ended September 30, 2025, the company reported a net profit of INR 0.09 Cr on a total income of INR 26.68 Cr.

Capital Expenditure

Gross fixed assets decreased to INR 356.98 Cr as of March 31, 2025, from INR 384.88 Cr in the previous year. Net block of assets stood at INR 113.34 Cr, down from INR 128.88 Cr, indicating a lack of fresh expansion and potential asset monetization.

Credit Rating & Borrowing

The company's credit rating is 'D' (Default) as assigned by ICRA. This is due to the company's bank accounts being classified as Non-Performing Assets (NPA) by the consortium of banks.

⚙️ Operational Drivers

Raw Materials

Cotton and fibers (implied by yarn manufacturing) are the primary raw materials, with costs and availability cited as major factors impacting the 23.11% revenue decline.

Capacity Expansion

The company has consolidated operations, closing units at Bathinda and Focal Point, Ludhiana due to non-viability and high costs. Currently, only the Ludhiana production facility is operational to optimize resource utilization.

Raw Material Costs

Raw material costs are a critical risk factor; fluctuations in these costs combined with finished goods price volatility are primary drivers of the shift from a -6.32% to a 10.18% operating margin.

Manufacturing Efficiency

The company closed inefficient units with deteriorating machinery to focus on the operational Ludhiana unit, aiming to improve the interest coverage ratio which rose to 2.06 in FY 2024-25.

📈 Strategic Growth

Growth Strategy

The company is focused on augmenting net worth and broadening its capital structure through preferential issues of warrants (e.g., INR 22.73 Cr raised from promoters in March 2025). Funds are being utilized to repay debt, meet working capital requirements, and monetize land from closed units.

Products & Services

Manufacturing and sale of various types of yarns.

Brand Portfolio

Oswal Group (Parent Group).

Market Expansion

The company is exploring avenues for the monetization of land at closed units in Bathinda and Ludhiana to improve liquidity.

🌍 External Factors

Industry Trends

The textile industry is currently characterized by fragmentation and a lack of scale. Future success depends on operational efficiency, environmental sustainability, and navigating volatile raw material prices.

Competitive Landscape

The industry is described as highly challenging and competitive, with significant pressure from both domestic and global players.

Competitive Moat

The company lacks a strong competitive moat due to industry fragmentation and its current financial distress (NPA status and 'D' credit rating).

Macro Economic Sensitivity

Highly sensitive to global and domestic demand-supply conditions and economic developments within India.

Geopolitical Risks

Operations are subject to fluctuations in exchange rates and changes in government regulations and tax structures in countries where the company has business contacts.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with SEBI (LODR) Regulations and various government regulations regarding the textile industry and environmental standards.

Environmental Compliance

The company conducts safety audits and risk assessments to ensure safer plants and compliance with relevant regulations.

Taxation Policy Impact

Current tax expense for the half-year ended September 2025 was INR 1.26 Cr.

Legal Contingencies

The company faced delayed compliance issues with Regulation 33 of LODR in 2022, resulting in fines from NSE and BSE. Its primary legal/financial hurdle is the NPA classification by its consortium of banks.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the company's ability to successfully convert warrants into equity to stabilize its capital structure and exit NPA status. Raw material price volatility remains a constant threat to the 10.18% operating margin.

Geographic Concentration Risk

Manufacturing is concentrated in Ludhiana, Punjab, following the closure of other units.

Third Party Dependencies

High dependency on non-promoter investors for capital infusion through warrant conversions (e.g., INR 9.11 Cr and INR 8.84 Cr raised in late 2024).

Technology Obsolescence Risk

The closure of the Bathinda unit was specifically attributed to the 'deteriorating condition of machines,' highlighting a significant risk of technological obsolescence.

Credit & Counterparty Risk

Trade receivables are relatively low at INR 4.22 Cr, but the company's own creditworthiness is compromised by its 'D' rating.