Financial Performance Highlights

  • Q2 FY27 revenue reached ₹1,045 crores, up 33% year-over-year, marking the first time quarterly revenue crossed ₹1,000 crores
  • Q2 FY27 EBITDA stood at ₹127 crores (highest ever reported)
  • Q2 FY27 PAT reached ₹53 crores (highest ever reported)
  • H1 FY27 revenue stood at ₹1,906 crores
  • H1 FY27 PAT reached ₹94 crores, already exceeding full-year FY26 PAT
  • Company has delivered 5 consecutive quarters of improving EBITDA and PAT performance

Operational Metrics

  • Return on capital employed improved from 7% two years ago to approximately 13% currently
  • Return on equity improved from about 4% to nearly 14%
  • Net debt to EBITDA reduced from 4.5x to 3.25x
  • Debtor days increased from 67 days in March 2026 to 77 days in September 2026
  • Government tender business contributed approximately ₹200 crores in H1 FY27
  • Garmenting business represents about 2% of total revenue

Capacity Utilization

  • Plants running close to full capacity across all divisions
  • Denim capacity utilization at 96-97% in last quarter
  • Garmenting utilization at 37% in Q2 FY27 (up from 22% YoY), expected to reach 50-60% for full year FY27

Capital Expenditure and Expansion

  • ₹1,500 crores capex plan announced for next 2-3 years
  • Currently 60% of capex details finalized and disclosed in investor presentation
  • Capex focused on modernizing and expanding spinning capacity and increasing raw material production
  • Expected to add 60-70% capacity on cotton yarn side
  • Approximately 40-50% of new capacity will be used captive for in-house denim fabric production
  • Capex funding: 70-75% through debt, balance through equity

Renewable Energy Initiative

  • Captive power generation increased from 10% of needs last year to 35% currently
  • Target: 50% by end of FY27 and 70% by Q1 FY28
  • Expected additional EBITDA benefit of ₹50-55 crores from yet-to-be-commissioned capacities

Capital Structure and Financing

  • Net debt to equity currently at 1.15x (slightly elevated due to capex phase)
  • Long-term debt currently approximately ₹1,000 crores
  • Expected net debt to reach ₹1,500 crores at end of capex cycle
  • Promoter infusion of ₹100 crores as equity planned, with ₹25 crores already received in current quarter
  • Cost of debt: 6-6.5%
  • India Ratings upgraded long-term rating to IND A with stable outlook in October

Working Capital and Receivables

  • Increase in debtor days primarily due to:
  • Growth in government tender business (longer payment cycles)
  • Elongated export shipment cycles
  • Company aims to bring debtor days back to March 2026 levels (67 days) in H2 FY27
  • Exploring options like factoring or bill discounting for government receivables
  • Government tender business currently below 10% of total sales

Raw Material Strategy

  • Cotton stocking peaks around March, lowest in September-October
  • No fixed mix for cotton sourcing (CCI auctions, imports, other sources based on viability)
  • 40% of polyester requirements met through in-house recycled waste capacity
  • Viscose 100% domestically sourced
  • No hedging on cotton prices or currency

Order Visibility and Market Outlook

  • Order visibility typically 45-60 days across divisions
  • Denim fabric realization approximately ₹170-175 per meter
  • Company confident in domestic market opportunities
  • Aspires to achieve 15-18% return on equity in the longer term

Management Commentary

  • Managing Director expressed confidence in doubling PAT from FY26 to FY27
  • Company focusing on cost reduction through renewable energy and capacity expansion
  • Maintaining comfortable net debt to EBITDA ratio target of 3x-3.5x
  • Operating cash flow expected to turn positive by March 2027