Nature of the Disclosure

This document is a transcript of the Q4 and Full Year FY26 Earnings Conference Call, submitted as a regulatory filing pursuant to SEBI LODR Regulation 30. The call was hosted by Elara Securities India Private Limited and featured the senior management of Himatsingka Seide Limited.

Key Financial & Operational Performance

Q4 FY26 Financials:

  • Consolidated Total Income stood at INR 721 crores, compared to INR 681 crores in Q4 FY25, registering a growth of 5.8% Year-on-Year.
  • Other Income for the quarter was INR 100 crores, primarily driven by foreign exchange movements of approximately INR 95 crores due to the depreciation of the Indian Rupee.

FY26 Context:

The management described fiscal 2026 as volatile due to prevailing U.S. tariff policies for most of the year and the impact of the war in the Middle East, particularly in the fourth quarter. This led to supply chain volatility and pricing pressure.

Capacity Utilization (Q4 FY26):

Utilization levels were mildly impacted due to the aforementioned headwinds and delays in outbound shipments to certain jurisdictions.

  • Spinning Division: 99%
  • Sheeting Division: 56%
  • Terry Towel Division: 63%

The overhang from the Middle East situation is expected to continue impacting shipments to certain jurisdictions into Q1 FY27.

Strategic Business Update & Diversification

The company is transitioning to a more diversified revenue and category mix to reduce concentration risk. This involves leveraging existing infrastructure and capabilities to enter new verticals beyond home textiles.

New Verticals:

1. Yarn Solutions: Leveraging the world's largest cotton spinning facility under one roof (211,584 spindles) to serve third-party clients globally and domestically.

2. Fabric Solutions: Leveraging existing capacities and debottlenecking initiatives to become a comprehensive player.

3. Apparel Solutions: Conservatively exploring initiatives as an adjacency, leveraging existing cut and sew infrastructure.

Rationale & Outlook:

The aim is to address larger market pools, improve pricing power, and position for sustainable long-term growth. The initiatives are expected to start contributing in a more material format from H2 FY27 (Q3 FY27 onwards). The long-term goal is for home textiles to eventually constitute approximately half of the total portfolio.

Infrastructure & Capex:

The company emphasized that this diversification requires no significant additional capital expenditure and will be executed within the existing maintenance capex budget, leveraging its 400-acre integrated textile complex.

India Market Performance

The company is working to enhance its position in the Indian market across its new verticals. The India revenue for the year was just over INR 100 crores, which is expected to improve further.

Capital Structure & Financing

Debt & Deleveraging:

  • The current Net Debt stands at approximately INR 2,550 crores.
  • The target is to reduce this to INR 2,000 crores within the next 12 months through ordinary course operations and potential capital market initiatives.

New Fundraise:

The Board, in its meeting on May 27, 2026, approved raising up to INR 850 crores through the issuance of senior secured redeemable non-convertible debentures (NCDs) on a private placement basis. The funds will be used to rebalance debt tenors in line with internal policies, and the move is expected to be largely net debt neutral.

Dividend

The company declared a dividend of INR 0.25 per equity share (face value INR 5) for FY26.

Management Guidance & Commentary

Margin Outlook:

  • The medium-term outlook for EBITDA margin remains in the band of 18% to 22%.
  • Near-term margins may face pressure from inflationary impacts related to geopolitical events, but any movements are expected to be marginal.

Long-Term Capacity Potential:

Management reiterated that at optimal capacity utilization levels, the existing infrastructure can deliver a top line of approximately INR 4,000 crores and an EBITDA of INR 700-800 crores. The new initiatives are aimed at achieving these run rates faster, estimated within 18 to 24 months.

Market Tailwinds:

Progress on Free Trade Agreements (FTAs) with the EU, U.K., and others, along with a potential normalization of U.S. tariff structures, is expected to enhance India's standing as a preferred sourcing destination and act as a tailwind for the company.

Participants

Company Management: Mr. Shrikant Himatsingka (EVC & MD), Mr. Sankaranarayanan M (President Finance & Group CFO), Mr. Bankesh Dhingra (Sr. VP & CFO - Operations), Mr. Bimal Agarwal (VP - Corporate Finance), Mr. Harikrishnan Balasubramanian (AVP - Finance, Banking & Compliance).

Moderator: Ms. Prerna Jhunjhunwala from Elara Securities (India) Private Limited.