Financial Performance Highlights

Full Year FY26 Performance:

  • Total income: INR1,370 crores
  • EBITDA: INR144 crores (22.5% YoY growth)
  • EBITDA margin: ~11%
  • PAT: INR28.4 crores (32.8% YoY growth)
  • One-time exceptional expense: INR9 crores related to implementation of new labor code law

Q4 FY26 Performance:

  • Total income: INR369.3 crores
  • EBITDA: INR46 crores (46% YoY growth)
  • PAT: INR9.6 crores (87% YoY growth)

Division-wise Performance

Yarn Division:

  • Q4 revenue: INR113 crores (vs INR123 crores in Q4 FY25)
  • FY26 revenue: INR449 crores (vs INR460 crores in FY25, 2% decline)
  • Q4 sales volume: 46 lakh kgs
  • FY26 sales volume: 194 lakh kgs
  • Capacity utilization: 78% in Q4, 77% for full year
  • Realizations improved by INR30-35 per kg due to value-added products
  • Labor shortages persisted, particularly in spinning

Fabric Division:

  • Q4 revenue: INR154 crores (vs INR145 crores in Q4 FY25)
  • FY26 revenue: INR569 crores (5% YoY growth)
  • Q4 sales volume: 62 lakh meters
  • FY26 sales volume: 230 lakh meters
  • Capacity utilization: 77% in Q4
  • Strong performance in premium fabrics and wool-blended products
  • Exports to Middle East affected by geopolitical situation

Garment Division:

  • Q4 revenue: INR96 crores (40% growth)
  • FY26 revenue: INR324 crores (18% growth)
  • Q4 sales volume: 11 lakh pieces
  • FY26 sales volume: 39 lakh pieces
  • Capacity utilization: 72% for FY26 (vs ~50% in FY25)
  • Strong order book and improved execution

Capital Structure and Debt Position

  • Net debt as of March 31, 2026: INR483 crores (vs INR456 crores as of March 31, 2025)
  • Debt-to-equity ratio: 0.8 times
  • Increase due to higher working capital requirements and machinery modernization

Dividend Declaration

  • Board recommended dividend of 20% on face value
  • Total payout: INR3.42 crores to shareholders

Strategic Initiatives and Outlook

FY27 Guidance:

  • Revenue guidance: INR1,450-1,500 crores
  • EBITDA margin expected between 10.5%-11%
  • Growth led by Fabric and Garment businesses (targeting 20% growth each)
  • First half may see volatility, better performance expected in second half

Operational Strategies:

  • Shift from made-to-order to predictive analytics data-driven approach
  • Focus on import substitution and reducing lead times
  • Leveraging AI-led solutions for demand forecasting
  • Expanding customer base in Europe and Far East
  • Strengthening relationships with large export customers including Walmart, JC Penney, Mango, Celio, Marks & Spencer

Capacity Expansion:

  • Planned capex: INR135-140 crores for FY27
  • Primarily for Yarn and Fabric divisions, sustainability investments, and 132 KVA line
  • Garment capex: INR3-5 crores
  • Surat SEZ facility awaiting permissions (capacity: 40,000-50,000 jackets, 100,000 pants)

Challenges and Headwinds

  • Labor shortages affecting spinning operations
  • Geopolitical uncertainties impacting Middle East exports
  • Elevated raw material costs (polyester, wool fiber, chemical dyestuffs, energy)
  • Increased freight and cargo insurance costs due to Middle East conflict
  • Near-term demand visibility concerns in Garment division for Q1 FY27

Associate Company Performance

  • Tesca Textiles (40% stake) reported INR100 crores turnover and ~INR10 crores PAT
  • Banswara Syntex share: ~INR4 crores
  • No plans to increase stake currently

Q&A Highlights

  • Walmart contributed ~INR15 crores to Q4 Garment revenue
  • Company targeting deeper relationships with 6-7 large export customers rather than adding new ones
  • Debt reduction planned from FY2028 onwards as loans have 5-7 year tenure
  • Segment margins not disclosed due to significant inter-segment transfers
  • Raw material cost increases being partially passed through to customers