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    Himatsing. Seide

    HIMATSEIDE
    Textiles·13 Nov 2025
    Management Summary

    Himatsingka Seide reported a challenging Q2 FY26 with a 9.3% revenue decline to INR629 crores, primarily due to persistent 50% tariffs in the U.S. market, which also led to a 400 bps slip in EBITDA margins. Despite this, the company saw a significant boost in other income from forex gains and managed to reduce net debt. Management is focused on mitigating tariff impacts, enhancing capacity utilization, and diversifying revenue streams away from the U.S., with plans for an INR500 crore equity raise within 12 months.

    Highlights

    4
    • Net debt reduced to INR2,436 crores in Q2 FY26 from INR2,680 crores in Q2 FY25.

    • Other income surged to INR77.70 crores in Q2 FY26, up from INR6 crores in Q2 FY25, driven by INR66 crores in forex gains.

    • Spinning division maintained high capacity utilization at 99%.

    • Domestic business (India) showed consistent year-on-year growth and expansion in MBO, large-format, e-commerce, and private label client spaces.

    Concerns

    3
    • Consolidated revenue from operations declined by 9.3% YoY to INR629 crores due to persistent 50% tariff overhang in U.S. markets.

    • EBITDA margin slipped by approximately 400 basis points from a typical 20% range, primarily due to tariff impacts and price benefits extended to customers.

    • Capacity utilization for Sheeting (60%) and Terry Towel (66%) divisions remained range-bound and below optimal, with enhancement delayed due to tariff issues.

    What Changed1

    vs Q3 FY26

    Guidance items6 → 3 (-3)

    Key financials

    Single quarter

    09 metrics
    1. 01Revenue from Operations₹629 Cr-9.4%YoY
    2. 02Other Income₹77.7 Cr
    3. 03Forex Gains (Total)₹66 Cr
    4. 04Forex Gains (Realized)₹8 Cr
    5. 05Net Debt₹2,436 Cr

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Debt

    Net ₹2,436 crores

    Guidance & targets

    3
    CategoryTargetPriority
    Revenue Diversification
    U.S. Revenue Stream Share
    below 50%
    High
    Profitability
    EBITDA Margin Impact from Tariffs
    rein that in and improve from here
    Medium
    Capital Raising
    Equity Raise Amount
    INR500 crores
    High

    Resolution of U.S. Tariff Issues

    Next quarter/soon
    Current50% tariff continues
    TargetTariff revision/conclusion

    Why it matters

    Resolution of tariffs is expected to normalize business operations, improve revenue streams, and alleviate margin pressure.

    although there are enough media reports about reaching conclusion soon in terms of a tariff revision, but nothing is out there as yet in terms of what the new tariff rates could potentially be. So as we speak, it still continues at 50%.

    How to verify

    detailed_narrative

    Risks & concerns

    3
    RiskSeverity

    Persistent U.S. Tariffs

    50% tariffs continue to affect revenue streams from the U.S. markets, causing a 9.3% YoY revenue decline and delaying business normalization.Management acknowledged

    high

    Margin Compression

    EBITDA margins slipped by approximately 400 basis points from a typical 20% range due to tariff impacts and price benefits extended to customers.Management acknowledged

    high

    Capacity Underutilization

    Enhancement of capacity utilizations for Sheeting (60%) and Terry Towel (66%) divisions has been delayed due to the tariff overhang, impacting efficiency.Management acknowledged

    medium

    Q&A highlights

    8

    “So essentially, there are two forms of impacts that the tariff has had on our operating performance. One is in the form of subdued revenues, which we just chatted about. Pretty much all of the revenue reduction is attributable to that. And the second piece is really dilution in our margin profile.”

    Clarifies that tariffs directly impacted both top-line revenue and bottom-line margins, with an estimated 400 bps hit to EBITDA.

    asked by Prerna Jhunjhunwala

    2 min read6 chapters

    Detailed Narrative

    01

    Revenue Performance and Tariff Impact

    Himatsingka Seide reported a consolidated revenue from operations of INR629 crores for Q2 FY26, marking a 9.3% year-over-year decline from INR694 crores in the same quarter last year. This reduction is primarily attributed to the persistent 50% tariff overhang affecting revenue streams from the U.S. markets. Management noted that while the tariff continues, the offtake of goods has remained largely stable, with no material interruptions to the order book.

    02

    Other Income and Forex Gains

    The company saw a significant increase in other income, which rose to INR77.70 crores in Q2 FY26, compared to approximately INR6 crores in the prior year. This surge was predominantly driven by foreign exchange gains, amounting to approximately INR66 crores. Of these forex gains, about INR8 crores were realized during the quarter, with the remainder being unrealized mark-to-market gains, benefiting from the rupee's depreciation against the U.S. dollar.

    03

    Profitability and Margin Compression

    The tariff impact led to a dilution in the company's margin profile, with EBITDA margins slipping by approximately 400 basis points from their typical 20% range. This correction is due to price benefits extended to customers to navigate the tariff challenge. Management estimates the weighted average impact of tariffs to be between 4% and 5% on the company's financials, which they are actively working to mitigate through efficiency optimization, exchange rate benefits, and product specification tweaks.

    04

    Capacity Utilization Overview

    Capacity utilizations remained range-bound during the quarter. The Spinning division maintained a high utilization rate of about 99%. However, the Sheeting division operated at 60%, and the Terry Towel division at 66%. Management emphasized that enhancing these capacity utilizations is a key focus, but progress has been delayed due to the ongoing tariff overhang, which they expect to normalize once tariff issues are resolved.

    05

    Debt Position and Capital Raising Plans

    The company's net debt stood at INR2,436 crores in Q2 FY26, a reduction from INR2,680 crores in the same period last year, indicating a range-bound debt position. To further deleverage its balance sheet, Himatsingka Seide has passed a resolution to raise up to INR500 crores through an equity round. This capital raise is considered a strategic priority and is targeted for completion in the short term, within 12 months.

    06

    Geographic Diversification and Domestic Growth

    Himatsingka currently services 38 jurisdictions and is actively working to enhance revenue streams from non-U.S. markets, with an aim to reduce U.S. revenue streams to below 50% over the next couple of years. The domestic India business, operating under brands like Himeya, Atmosphere, and Liv, continues to demonstrate consistent year-on-year growth, expanding its footprint in MBO spaces, large-format stores, e-commerce, and private label clients.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.