Detailed Narrative
Strong Q3 FY26 and 9M FY26 Financial Performance
Borana Weaves Limited delivered robust financial results for Q3 FY26, with revenue growing 42% YoY to ₹111.36 crores. EBITDA increased by 51% YoY to ₹27.09 crores, achieving a margin of 24.32%. Profit after tax saw a significant 63% YoY rise to ₹18.55 crores. For the nine months ended December 31, 2025, revenue stood at ₹287.86 crores (up 36% YoY), EBITDA at ₹65.9 crores (up 44% YoY) with a margin of 22.89%, and PAT at ₹47.40 crores (up 62% YoY) with a margin of 16.47%.
Strategic Capacity Expansion and Modernization
The company is on track to double its capacity within the next two years, targeting March 2028. This expansion involves a total investment of ₹350-400 crores, comprising ₹200 crores for capex, ₹50-70 crores for working capital, and investments in renewables. As part of this, 160 high-speed waterjet looms have been added, costing ₹35 crores and expected to add ₹60-75 crores in annual incremental revenue. The company aims to reach 1500 looms by 2027.
Renewable Energy Initiatives and Cost Optimization
Borana is making significant strides in renewable energy, with a ₹125 crore investment in projects. This includes a 3.54 MW rooftop solar project commissioning in February 2026 and a 19.79 MW solar wind hybrid project expected by May 2026. These initiatives are projected to meet 70-80% of the company's power requirements and generate annual power savings of ₹18-20 crores, enhancing sustainability and reducing operational costs.
Raw Material Dynamics and Market Outlook
Management noted that raw material costs in their segment do not fluctuate significantly. The removal of anti-dumping duty on Chinese raw materials in December 2025 is expected to lead to cheaper inputs, potentially improving gross margins in Q4 FY26. The company's product mix is dynamic, adapting to demand for higher GSM fabrics during winter, which contributes to improved realization, reaching ₹16.90 per square meter in Q3 FY26 compared to ₹15.80 in FY25.
Capital Allocation and Debt Profile
The company maintains a strong balance sheet with a net debt-free status. Total debt on books is ₹60 crores, comprising ₹35 crores long-term and ₹25 crores short-term. For the ₹115 crore renewable energy projects, only ₹40 crores will be funded through debt, with the remainder from internal accruals. Cash on reserve is reported between ₹40-55 crores, indicating healthy liquidity for future investments.
Operational Efficiency and Utilization Targets
Borana Weaves Limited reported manufacturing 6.6 crore metres of fabric in Q3 FY26 and 16.31 crore metres in 9M FY26, reflecting strong capacity utilization. Management expects utilization to easily reach over 80% in the next year, with a maximum achievable utilization of 90%. The company's integrated operating model and scale contribute to consistent quality, faster turnaround times, and strong execution discipline.