Q1 FY27 Financial Performance

Income Statement (₹ Crore):

  • Total Income: ₹410 (Q4FY26: ₹375, +9% QoQ; Q1FY26: ₹270, +52% YoY)
  • Operating Expenses: ₹340 (Q4FY26: ₹323, +5% QoQ; Q1FY26: ₹238, +43% YoY)
  • EBITDA: ₹70 (Q4FY26: ₹52, +34% QoQ; Q1FY26: ₹32, +116% YoY)
  • EBITDA Margin: 17.0% (Q4FY26: 13.9%, +310 bps; Q1FY26: 12.0%, +500 bps)
  • Interest: ₹2 (Q4FY26: ₹2, +4% QoQ; Q1FY26: ₹1, +37% YoY)
  • Depreciation: ₹15 (Q4FY26: ₹15, +2% QoQ; Q1FY26: ₹13, +18% YoY)
  • PBT: ₹53 (Q4FY26: ₹35, +49% QoQ; Q1FY26: ₹18, +191% YoY)
  • Tax Expenses: ₹13 (Q4FY26: ₹8, +73% QoQ; Q1FY26: ₹5, +193% YoY)
  • PAT: ₹39 (Q4FY26: ₹28, +42% QoQ; Q1FY26: ₹14, +191% YoY)
  • PAT Margin: 9.6% (Q4FY26: 7.4%, +220 bps; Q1FY26: 5.0%, +460 bps)

Operational Highlights

Sales Volume:

  • Yarn: 10,500 MT (Q1FY26: 8,400 MT)
  • Knitted Fabric: 898 MT (Q1FY26: 247 MT)
  • Griege Fabric: 59 lakh meters (Q1FY26: 36 lakh meters)
  • Capacity Utilization: 99% (consistent with Q1FY26)

Revenue Mix Shift:

  • Fabric revenue share increased to 16% in Q1FY27 from 9% in Q1FY26
  • Yarn revenue share decreased to 84% from 91% in the same period

Strategic Initiatives and Expansion

Green Energy:

  • Current capacity: 65 MW, meeting ~70% of energy needs
  • Additional 11 MW green energy capacity underway, expected commissioning in Q3 FY27
  • Target: 75 MW total green energy capacity covering up to 75% of requirements

Capacity Expansion:

  • 25k spindles commissioned in June 2025, production ramp-up completed
  • Expected to generate revenue of ₹250 Cr for full year
  • Knitting Machines: Phase 1 (15 machines) commissioned in Q4 FY26
  • Phase 2 (25 machines) expected to be commissioned in FY27

Management Commentary

CEO Marshal Sonavane noted Q1 FY27 was a strong quarter driven by improving industry fundamentals and disciplined execution. Key points:

  • Sequential improvement in cotton and yarn spreads
  • Sufficient cotton inventory providing protection from raw material volatility
  • Focus on operational excellence, cost efficiency, and working capital optimization
  • Vertical integration expected to drive higher RoCE and sustainable growth
  • Long-term EBITDA margin guidance: 15-18% range

Market Environment and FTA Benefits

The presentation highlighted benefits from recent Free Trade Agreements:

  • Oman FTA (effective June 3, 2026): Zero duty access
  • New Zealand FTA (2025): Duty elimination from 3-5% to 0% for yarn & fabric
  • UK FTA (commenced July 15, 2025): Removes ~8-12% tariff disadvantage
  • EU FTA (implementing in 2027): 0% import duty vs earlier ~8-12%
  • Ongoing negotiations with Canada, Peru, Israel, and GCC for duty elimination

Other Business Updates

  • 11% cotton import duty waived from June 1 to October 30, 2026
  • Indian cotton prices reached near-global parity (~0.5¢/lb gap)
  • Participated in Bharat Tex 2026 (July 14-17, New Delhi)
  • Company demerged from GHCL Limited effective April 1, 2023
  • 98%+ utilization rate maintained even in tough markets
  • ~80% of workforce consists of skilled women