Financial Performance Overview
Sanathan Textiles Limited reported strong consolidated revenue growth of 27.10% YoY to ₹3,811.18 Crores for FY 2025-26, though profitability declined with net profit at ₹77.35 Crores (FY25: ₹160.45 Crores) due to significantly higher depreciation (₹93.10 Crores vs ₹45.86 Crores) and finance costs (₹95.85 Crores vs ₹17.96 Crores) from commissioning of new facilities. Standalone performance showed better profitability with net profit of ₹191.91 Crores, up 10% YoY.
Operational Highlights and Expansion
The company achieved significant capacity expansion milestones, commissioning Phase 1 of its Punjab manufacturing facility (700 MTPD capacity) and expanding technical textiles capacity at Silvassa from 9,000 MTPA to 18,000 MTPA. Total installed capacity reached 479,250 MTPA across three business verticals. Revenue contribution was led by polyester filament yarns (82%, ₹3,118.31 Crores, grew 35.3% YoY), followed by cotton yarns (15%, ₹583.00 Crores, grew 3% YoY), and technical textiles (3%).
Capital Structure and Investments
The company completed significant capital expenditure of ₹636.10 Crores, primarily through subsidiary Sanathan Polycot. Investments in subsidiaries included ₹9.90 Crores in equity shares, ₹725.33 Crores in preference shares (equity portion), and ₹323.70 Crores in preference shares (debt portion) of Sanathan Polycot. The company provided corporate guarantees aggregating ₹1,500.00 Crores for subsidiary loans, with ₹1,163.18 Crores disbursed.
Corporate Governance and AGM Matters
The Board did not recommend dividend for FY26 to retain profits for funding ongoing expansion projects. The 21st Annual General Meeting is scheduled for September 11, 2026, with agenda items including adoption of financial statements, re-appointment of Mr. Sammir Dattani as Executive Director, and re-appointment of Walker Chandiok & Co LLP as Statutory Auditors for a second term at remuneration of ₹72,00,000 per annum.
Employee Benefits and ESOP
Defined benefit obligation stood at ₹15.71 Crores with expense recognized of ₹5.22 Crores. The company modified its ESOP 2021 plan, repricing outstanding stock options to ₹426.15 per option and granting 81,500 new options. Total options outstanding were 292,190 with weighted average exercise price of ₹426.15.
Risk Management and Contingencies
The Group's gearing ratio increased to 80.77% (FY25: 59.96%) with total borrowings of ₹1,487.24 Crores. Contingent liabilities totaled ₹85.70 Crores, including customs duty matters of ₹78.92 Crores related to capital goods imported under MOOWR Scheme. Foreign exchange exposure included trade payables in USD of ₹104.49 Crores and borrowings in EURO of ₹5.81 Crores.
Future Outlook and Expansion Plans
The company plans Phase 2 of Punjab facility (91,250 MTPA) by end of FY27 and a new cotton yarn manufacturing facility in Madhya Pradesh (73,000 spindles). Technical textiles capacity expansion at Silvassa (additional 9,000 MTPA) has plant and machinery installed. ICRA reaffirmed credit ratings at [ICRA]A (Positive) for long-term and [ICRA]A2+ for short-term facilities.