BANSWRASNSEQ1 & FY26August 08, 2025

Banswara Syntex Limited

6,168words
109turns
9analyst exchanges
2executives
Management on call
Ravindrakumar Toshniwal
VICE
Kavita Gandhi
CHIEF FINANCIAL OFFICER – BANSWARA SYNTEX LIMITED
Key numbers — 40 extracted
10%
several textile categories. On the domestic front, the market is growing steadily at a CAGR of 10% and is expected to reach USD350 billion by 2030 while exports are projected to scale up to USD100
350 billion
n the domestic front, the market is growing steadily at a CAGR of 10% and is expected to reach USD350 billion by 2030 while exports are projected to scale up to USD100 billion by FY '30. This growth is being
100 billion
10% and is expected to reach USD350 billion by 2030 while exports are projected to scale up to USD100 billion by FY '30. This growth is being supported by various policy measures of the government, notably t
99%
ly the good work done in making the India-U.K. free trade agreement happen. This has eliminated 99% of the traded products from India with -- from duty and tariffs and will boost and enhance the co
100%
gratulations to the Ministry of Textiles for achieving this. In addition, initiatives such as the 100% FTI under the automatic route and a 19% increase in the Ministry of Textiles' budget allocation a
19%
for achieving this. In addition, initiatives such as the 100% FTI under the automatic route and a 19% increase in the Ministry of Textiles' budget allocation are encouraging both the domestic and int
90%
-friendly right now, such as Bangladesh, Egypt, Sri Lanka, Jordan, and Vietnam. And today, nearly 90% of our U.S.-linked business is based on fabric routed through these different geographies around
12.7%
et me take you through the financial performance for the quarter. Our total income increased by 12.7% to INR309.6 crores on quarter 1 FY '26 on a year-on-year basis. The EBITDA also increased margina
INR309.6 crore
e you through the financial performance for the quarter. Our total income increased by 12.7% to INR309.6 crores on quarter 1 FY '26 on a year-on-year basis. The EBITDA also increased marginally to INR21.9 cro
INR21.9 crore
309.6 crores on quarter 1 FY '26 on a year-on-year basis. The EBITDA also increased marginally to INR21.9 crores during quarter 1 FY '26. However, the profit before depreciation and tax was lower at INR11.2 cr
INR11.2 crore
21.9 crores during quarter 1 FY '26. However, the profit before depreciation and tax was lower at INR11.2 crores. And as a PAT, the company recorded a loss of INR1.4 crores in quarter 1 FY '26. Our total incom
INR1.4 crore
re depreciation and tax was lower at INR11.2 crores. And as a PAT, the company recorded a loss of INR1.4 crores in quarter 1 FY '26. Our total income did grow by 12.7% on a year-on-year basis, primarily drive
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Guidance — 20 items
Ravindrakumar T
opening
“On the domestic front, the market is growing steadily at a CAGR of 10% and is expected to reach USD350 billion by 2030 while exports are projected to scale up to USD100 billion by FY '30.”
Ravindrakumar T
opening
“So we expect that out of our total exports of fabric, only 10% of our fabrics were going as garments directly from India.”
Ravindrakumar T
opening
“Due to this, we expect that there should not be any reduction in our targets of whatever exports we achieve for the U.S.A.”
Ravindrakumar T
opening
“Moreover, the investments we have made in modernization and process improvements are already beginning to show results and will enable us to address such issues more efficiently going forward.”
Ravindrakumar T
opening
“Going forward, we do expect that the profit before tax will remain under pressure, mainly due to higher interest costs from increased working capital and term loans as well as with the increased depreciation during every quarter.”
Ravindrakumar T
opening
“And we could not get the utilization levels that we target.”
Ravindrakumar T
opening
“We expect the next quarters to be better, supported by good order bookings that we already have and the launch of our new Siro collections.”
Ravindrakumar T
qa
“Now going forward, with this resolved and the capacity utilization issue not being there, we are seeing demand in spite of all of the challenges that we expect, given the scenario of what has happened with the U.S.”
Ravindrakumar T
qa
“This year's capex, we are expecting to spend about another INR100 crores, which is one to complete the 132 KVA project, which we had on our power part.”
Ravindrakumar T
qa
“So this is something which we will be doing going forward in all of the quarters.”
Risks & concerns — 4 flagged
Going forward, we do expect that the profit before tax will remain under pressure, mainly due to higher interest costs from increased working capital and term loans as well as with the increased depreciation during every quarter.
— Ravindrakumar T
We are hoping that the government permissions come through, but it's rather difficult to say because delisting from an SEZ and getting a permission to operate that same area in the DTA is proving to be longer than we thought.
— Ravindrakumar T
I mean, the challenge is to sell it out.
— Ravindrakumar T
The challenge is to be - - and this we are working on aggressively to figure out a way to offer the customers the price point they need and still maintain a margin which is decent.
— Ravindrakumar T
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Q&A — 9 exchanges
Q
Sir, I have two questions. One is what are our margins in yarn, fabric and garment? Like individually, I would like to know segment-wise. And second is in our last con call, you did mention about achieving 12% EBITDA and top line of INR1,550 crores, okay? So how do you plan to achieve this? So these are my two questions?
Ravindrakumar T
Right, thank you. So first, when I speak about EBITDA margin, I'm not speaking with 1 quarter in mind or specifically quarter 1 in mind. But over a general period of time over the years, the yarn EBITDAs have been in the range of, let's say, between 6% to about 8% in the yarn business. In the fabric business, they have been in the range of maybe 8% to 10% or 8% to even 11% or 12% sometimes. And the garment business has been, what would you say, Kavita, is roughly the EBITDA that we get, range? Range of EBITDA is 6% to 8%. 6% to 8% in the garment business. So those are the normal EBITDAs that w
Q
Sir, last year, we invested around INR148 crores. So could you just run through what exactly was the capex breakup and what is this year's capex?
Ravindrakumar T
Right. The breakup of where we invested the INR150 crores, I'll just give you briefly. I think it was mainly about INR60 crores to INR70 crores was within the fabric business, which was mainly in worsted spinning and in adding some machineries in our finishing. And the balance was invested within certain infrastructure improvements within power and spinning and a little bit in the garment part. Those were the main investments, but we are seeing definitely that all the investments we made will result now in an increased business that we have in our worsted fabric as well as now have more capaci
Q
I have two questions. One is with advanced booking in place for upcoming quarters in the yarn business, can you share your visibility on yarn volumes and expected revenue momentum in the coming quarter?
Ravindrakumar T
You're only looking at yarn right now, is it, Rajeev? Yes. Okay. So the yarn bookings, we don't usually accept for more than 30 days. So we have a coverage of around 30 days of yarn booking. More than that, we don't accept because our delivery period for yarn is within 15 to 30 days, right. So normally, we don't take advanced bookings beyond that because in any case, if the market changes and the prices increase, we stand to lose. And if they decrease, people don't lift. Okay. And another follow-up question is that garments have done well this quarter, both in terms of volumes and revenue. Wha
Q
Going on the last participant question, so on the garment side, given the U.K. FTA and China Plus headwinds, how do you see the export pipeline shaping for garments?
Ravindrakumar T
So we think that it will do very well in both the U.K. and Europe. As far as the U.S.A. is concerned, it's particularly dead because we can't battle a 50% or a 25% tariff, especially when all around us, our neighbouring countries have less than us, right? So it's going to be good even for countries like Korea and Japan and the Far East. So overall, I think that the ecosystem of the textiles in India of MMF and worsted fabrics has evolved. We now have availability of a lot more variety in India and this is going to help our China Plus One strategy. Whatever you may say, China will remain a form
Q
So I want to know, has the company like reduced its garmenting capacity? Because I'm looking at the previous presentation. The trousers and the jacket capacity has slightly reduced as compared to the numbers given so I wanted to check on that?
Ravindrakumar T
Yes, it's correct. Good observation, and you have picked that up because we shut down our SEZ in Surat. So those machines haven't been moved and installed yet. We are waiting for the permission to be able to revive that unit as a DTA, domestic tariff area, instead of SEZ. So that capacity has been reduced in both the jacketing and the trousers. But when is it expected to start? We are hoping that the government permissions come through, but it's rather difficult to say because delisting from an SEZ and getting a permission to operate that same area in the DTA is proving to be longer than we th
Q
Sir, your garment business, how much you do domestic Indian market and how much is exports?
Ravindrakumar T
So what was it in the last quarter? In last financial year, it was almost, I think, 60%, 70% domestic and 30% export last financial year. But this financial year, we expect that, that mix will be closer to export increasing. So 50-50 is what we are targeting. Quarter 1 is almost like that. Quarter 1 is almost 50-50. Okay. And sir, in garments, you said in the past, you have done EBITDA margin in the range of 6% to 8%. It seems low. So is there any scope for improvement? And if yes, what are the levers available? We are trying to improve it but the headwinds have been a lot. As such, anyway, th
Q
Yes, what is our net debt? I missed that number.
Ravindrakumar T
Net debt, one second. So net debt as on 30th June is INR465 crores. INR455 crores (Wrongly said, this should be read as, 465). Sir, do you expect it to peak somewhere here? Because you're talking about INR100 crores capex but cash flow from operations will also be there. Yes. So this is on the higher side only. Even right now, our borrowings are on the higher side on the working capital part. Do you think this year, deleveraging will begin? Well, hopefully, definitely by next year... End of the year, debt will be lower than the current debt? Not this year. But next year, we do expect that to h
Q
Yes. In case of yarn, how will be our mix between, say, cotton or blended yarn, sir?
Ravindrakumar T
So we are not doing any cotton yarn at all. We do 0 cotton yarn spinning in our company. We are making only blended yarn so it's 100% blended yarn or even 100% polyester spun, but all synthetic, all synthetic blended. All synthetic blended. And in terms of internal consumption for yarn and yarn for fabrics also? So the internal consumption is about one-third of our production. If we produce around 2,700 tons, we are consuming internally maybe about 700, 800. Okay. And given then I think synthetic what we have heard, how would be the opportunity for export of this synthetic yarn compare to, say
Q
Thank you. I just want to thank everyone for being here with us on this conference call. To conclude, while the near-term operating environment is quite dynamic, we are optimistic about the growth in all three of our business verticals as well as a vertical company, our overall focus on increasing turnover. Our focus remains on making sure we improve our capacity utilization and increase the sales. We believe the initiatives we are taking will help us to navigate the current challenges, and we view the current challenges as something which will make us stronger and allow us to focus more on po
Management
Speaking time
Ravindrakumar T
49
Nirbhay Mahawar
13
Moderator
11
Runit Kapoor
9
Naysar
7
Vikram Suryavanshi
7
Kavita Gandhi
5
Rajeev Saraf
4
Isha Shah
2
Viraj Shah
2
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Opening remarks
Ravindrakumar T
Thank you, Avirath. Hello, everyone. Good afternoon. I welcome you all to our quarter 1 FY '26 earnings conference call. Along with me on this call, we have our CFO, Ms. Kavita Gandhi and SGA, our Investor Relations Advisors. I hope all of you have been able to go through our investor presentation uploaded on the exchange and on our company website. Now before I move to the specifics of our performance, let me briefly touch on the broader textile industry landscape, which remains an essential pillar of India's economic growth. India has firmly established itself as the second largest producer and the third largest exporter of textiles and garments globally, ranking among the top five exporters across several textile categories. On the domestic front, the market is growing steadily at a CAGR of 10% and is expected to reach USD350 billion by 2030 while exports are projected to scale up to USD100 billion by FY '30. This growth is being supported by various policy measures of the governmen
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