Borana Weaves Limited — Q3 FY26 earnings call

Call held 27 Jan 2026

Management summary

Borana Weaves Limited reported a strong Q3 FY26, with significant year-on-year growth in revenue, EBITDA, and PAT, driven by robust demand and operational efficiencies. The company is actively pursuing capacity expansion, aiming to double its capacity by March 2028 with a substantial capex plan. Strategic investments in renewable energy are underway to optimize power costs and enhance sustainability. Management highlighted improved gross margins in Q4 due to favorable raw material pricing post-removal of anti-dumping duties.

Highlights

  • Q3 FY26 Revenue grew 42% YoY to ₹111.36 crores, driven by strong order books and healthy sales volumes.

  • EBITDA for Q3 FY26 increased 51% YoY to ₹27.09 crores, with margins expanding to 24.32%.

  • Profit after tax for Q3 FY26 rose 63% YoY to ₹18.55 crores, reflecting robust growth and profitability.

  • The company maintains a net debt-free position, with total debt at ₹60 crores (₹35 crores long-term, ₹25 crores short-term).

  • Strategic investment in renewable energy projects (₹125 crores total) is expected to yield annual power savings of ₹18-20 crores and meet 70-80% of power requirements.

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹111.36 Cr
    YoY +42%
  • EBITDA Margin
    24.3%
  • PAT
    ₹18.55 Cr
    YoY +63%
  • Fabric Manufactured
    ₹6.6 Cr

9M

  • FY26 Revenue
    ₹287.86 Cr
    YoY +36%
  • FY26 EBITDA Margin
    22.9%
  • FY26 PAT
    ₹47.4 Cr
    YoY +62%
  • FY26 Fabric Manufactured
    ₹16.31 Cr

What they filed

Q1 FY27: revenue up 24.7%, net profit up 33.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue71 78 79 81 96 +35%111 +42%101 +28%101 +25%
EBITDA12 18 17 17 22 +83%27 +50%26 +53%26 +53%
Net profit8 11 11 12 17 +113%19 +73%17 +55%16 +33%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹350 Cr For the total capacity doubling, debt will be taken as required along with company's generation. For renewables, ₹40 crores is debt, rest from own effort.
    • Addition of 160 high-speed waterjet looms ₹35 Cr
    • Total investment for doubling capacity (capex component) ₹200 Cr
    • Renewable energy projects (3.54 MW rooftop solar, 19.79 MW solar wind hybrid) ₹125 Cr
    Okay. So, it will increase our capacity annually by the INR5 crores meter of the fabric. And the cost of this project will be around INR35 crores. / For doubling the capacity, we already initiated because around 160 looms are already -- we are planning in the Unit 4B. So, that is a part of the same. So, it will be around we are going to be around INR350 crores to INR400 crores. Total investment will be there to doubling our capacity. / Our renewable energy initiatives are progressing as planned, with a rooftop solar project of 3.54 MW awarded to Lakshmi Electricals on track of commissioning in Feb 2026 and the 19.79 MW solar wind hybrid project that includes 9.89 MW solar and 9.9 MW wind awarded to Clean Max Enviro Energy Solutions, expected to commence operation in May 26. / The interest will not be so high because our total cost is of INR115 crores. Out of that, we are taking only INR40 crores debt and the remaining we are doing the rest with our own effort.
  • Debt Gross ₹60 Cr
    Yes. INR35 crores is our long-term. / And INR25 crores is short-term.
  • M&A Attero Recycling Acquisition · Closed · Consideration ₹[object Object] (cash)

    Purely equity investment, not core business target.

    Sir, I wanted to know that at the start of January, we had made an investment of INR1 crore in Attero Recycling. The amount of money is not that much, but I wanted to know that how does our core business for synthetic fabric manufacturing align with it? And secondly, will we get to see some other non-core capital allocation in the future? / No, we will not do that much. We have made a purely equity investment, but our target is not that at all. Our target will be purely the business only.
  • Liquidity Cash ₹40 Cr
    INR55 crores to INR40 crores.

Guidance & targets

Capacity

  • Total Looms Capacity · by March 2028 · High confidence 2,000 looms

    From 1,000 looms today

    We already have started strategies for doubling our capacity in the next two years.

    — Rajkumar Borana

  • Total Looms Capacity · by 2027 · High confidence 1500 looms
    By 2027, we are planning to make it up to 1500.

    — Rajkumar Borana

Power Sourcing

  • Renewable Energy Share Power Sourcing · High confidence 70-80%
    Approximately 70%-80% of the company's current power requirements are expected to be met through renewable energy sources.

    — Rajkumar Borana

Cost Savings

  • Annual Power Savings from Renewables Cost Savings · annually · High confidence ₹18-20 crores
    It will be around nearly INR18 crores to INR20 crores.

    — Rajkumar Borana

Profitability

  • Gross Margin Profit Profitability · Q4 FY26 · Medium confidence better than Q3
    So, in quarter 4, it seems that gross margin profit may be better than this one also.

    — Rajkumar Borana

  • EBITDA Margin Profitability · Medium confidence increase quarter-on-quarter
    So, marginally, it is going to be increased from quarter-on-quarter.

    — Rajkumar Borana

Revenue

  • Incremental Revenue from 160 Looms Revenue · annually · High confidence ₹60-75 crores
    It will be around INR60 crores to INR75 crores.

    — Rajkumar Borana

Capacity Utilization

  • Overall Capacity Utilization Capacity Utilization · next one year · Medium confidence 80+%
    No, sir, it is increasing. We will easily reach around 80 plus.

    — Rajkumar Borana

  • Maximum Utilization Capacity Utilization · High confidence 90%
    Up to 90%.

    — Rajkumar Borana

Taxation

  • Income Tax Rate Taxation · High confidence 17.25%
    Now it's 17 point something. 15 plus something surcharge is around 17.25.

    — Rajkumar Borana

What to watch in Q4 FY26

Rooftop Solar Commissioning

next quarter
Current On track for commissioning in Feb 2026
Target Commercial operations

Why it matters

Successful commissioning will contribute to power cost savings and sustainability goals, impacting operational expenses.

Our renewable energy initiatives are progressing as planned, with a rooftop solar project of 3.54 MW awarded to Lakshmi Electricals on track of commissioning in Feb 2026

Risks & concerns

  • Raw material price volatility

    low

    Management stated that raw material costs in their segment do not fluctuate much and that the removal of anti-dumping duty on Chinese raw material will be beneficial.

    Analyst downplayed

  • Impact of EU generalization scheme suspension on exports

    low

    Management clarified that they do not directly export; their buyers handle exports. Their versatile machinery allows them to adapt to different market demands, mitigating direct impact.

    Analyst downplayed

  • Geographical concentration in Surat

    low

    Management stated that Surat is the 'Manchester of synthetic fabric' and the optimal location for their operations, having been there for over 50 years, implying it is not a concern.

    Analyst downplayed

Q&A highlights

6 direct
Raw Material Pricing and Anti-Dumping Duty Impact Direct
So, in quarter 4, it seems that gross margin profit may be better than this one also. ... from December, the government has freed the anti-dumping duty, the raw material which is coming from China, and we are profiting the same.

Management clarified that the removal of anti-dumping duty on Chinese raw materials will lead to cheaper inputs and potentially higher gross margins in Q4 FY26, directly impacting profitability.

Asked by Raman KV

Capex and Revenue for Technical Textiles Partial
So, in technical textiles, we are adding our products which goes for the technical textiles. So, actually we are not directly doing the technical textiles. But our buyers, which are buying our fabrics, they are doing the coating on that fabric and use as a technical textile.

Management clarified their indirect involvement in technical textiles, focusing on supplying fabrics to buyers who then process them. This indicates their strategy is capacity expansion for versatile fabrics rather than direct entry into technical textile manufacturing.

Asked by Raman KV

Annual Power Savings from Renewable Energy Direct
It will be around nearly INR18 crores to INR20 crores.

Management provided a specific financial benefit from their renewable energy investments, quantifying the expected annual power cost savings, which is a significant operational efficiency gain.

Asked by Disha

Total Capex for Capacity Doubling Direct
So, it will be around we are going to be around INR350 crores to INR400 crores. Total investment will be there to doubling our capacity.

Management outlined the comprehensive investment required for their ambitious capacity doubling plan, including capex, working capital, and renewables, providing clarity on future capital allocation.

Asked by Disha

Government Subsidies Received Direct
Yes. We are having -- enjoying some subsidies of interest and power. ... in the interest, we are getting around 3% of our 3% to 4% of the interest. ... in power, we are getting around 20% to 22% of the subsidy in a percentage wise. It's INR2 per unit.

Management detailed the specific government subsidies they receive for interest and power, highlighting a factor that contributes to their cost competitiveness and profitability.

Asked by Param Vora

Realization Improvement and Product Mix Direct
Yes, you are correct. In our product range, we keep on switching demands. As you know, there are some winters and everything. So, they need some higher GSM fabrics. That will increase the cost of the fabric and that's why the selling rate is higher.

Management explained the drivers behind improved realization, attributing it to a flexible product mix that adapts to seasonal demand for higher GSM (Gram per Square Meter) fabrics, indicating strategic product management.

Asked by Ankur Gulati

Impact of EU Generalization Scheme Suspension on Exports Partial
Sir, what happens in this is that we do not do any direct export. Our buyers do it. So they have an export business. ... And as per the requirement of the country, our machine is versatile. So we are like the fabric, in the US, we used to have bad seats, etcetera. That was a little down for us. So instead of that, they are exporting to UAE, etcetera.

Management clarified that the suspension of EU export benefits has an indirect impact as they don't directly export. Their versatile machinery allows them to adapt to changing market demands and buyer preferences, mitigating direct risk.

Asked by Parth Patel

Current Debt on Books Direct
Yes. INR35 crores is our long-term. / And INR25 crores is short-term. ... Okay. It is as good as nil. I mean, we are almost, we can say, debt free.

Management provided clear figures for their long-term and short-term debt, confirming their 'almost debt-free' status, which is a strong indicator of financial health and prudent capital management.

Asked by Miten Shah

2 min read 6 chapters

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.

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