Financial Performance Highlights (Q1 FY27)

  • Revenue: ₹875 crore (highest ever quarterly revenue)
  • Growth: 10.3% YoY | 1.8% QoQ
  • EBITDA: ₹155.6 crore (before other income)
  • Growth: 39.85% YoY | 19.3% QoQ
  • EBITDA Margin: 17.78%
  • Improvement: 376 bps YoY | 261 bps QoQ
  • PAT: ₹75.3 crore
  • Growth: 83.63% YoY | 31.2% QoQ
  • EPS: ₹13.39 per share
  • Cash EPS: ₹20.08 per share
  • Geographic Revenue Split: Export 65% | Domestic 35%
  • Capacity Utilization: Spinning 98% | Woven fabric 92%

Operational Highlights

  • Yarn Spreads: Improved to approximately ₹130/kg in Q1 FY27 from ₹110/kg in Q4 FY26, sustained into Q2 FY27
  • Cotton Price Parity: Indian cotton premium reduced from 5-7% above Cotlook Index in FY23-24 to 1-2% below Cotlook Index currently
  • Cost Initiatives: Power cost savings through renewable energy expansion and energy efficiency measures
  • Inventory Impact: Minimal inventory gains despite cotton price increases; company maintains balanced inventory levels

Capacity Expansion Update

  • Spinning Capacity: Adding 74,000 spindles (22,000 metric tons)
  • Timeline: Expected commissioning by December 2026
  • Utilization: Full ramp-up expected by March 2027
  • Internal Consumption: ~60% for fabric production
  • Fabric Capacity: Adding 35 million meters
  • Components: Weaving and finishing capacity (solid dyed and yarn dyed fabrics)
  • Timeline: Weaving to start in couple months; processing by Diwali 2026
  • Utilization: Full ramp-up may take 6-8 months post-commissioning (into FY28)
  • Revenue Impact: Expected incremental revenue of ₹500 crore from fabric expansion
  • Margin Impact: Fabric business expected to contribute 100-150 bps margin improvement

Renewable Power Expansion

  • Current Savings: ₹1.2-1.5 crore in Q1 FY27
  • Expected Annual EBITDA Impact: ~₹50 crore upon completion
  • Timeline: Expected operational by end of Q3 FY27
  • Blended Power Cost Target: ~₹5.50/unit upon completion (60% renewable share)

Management Guidance & Outlook

  • Industry Context: Positive demand environment supported by US tariff removal, India-UK FTA, and expected EU FTA
  • China Demand: Cotton yarn imports increased to 110-115 million kg in CY26 from 90-100 million kg in CY25
  • FY27 Revenue Expectation: Higher than FY26 with ₹200-300 crore incremental contribution from new capacities
  • Margin Guidance: Expected to remain in 16-20% range
  • Fabric Business Growth: Expected to grow from ₹700 crore in FY26 to ₹1,200 crore in FY28

Q&A Session Key Points

  • Volume Clarification: Apparent yarn volume decline due to increased internal consumption for fabric production and logistics-related inventory buildup
  • Margin Sustainability: Supported by cost initiatives and stable demand environment
  • Future Growth Areas: Evaluating garmenting and home textiles for future expansion post-FY28
  • Cotton Crop: FY26 production estimated at 318-320 lakh bales (similar to previous year); FY27 crop dependent on monsoon conditions
  • Working Capital: No significant change in cycle
  • Buyback: Not considering due to growth capital requirements