Himatsingka Seide Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Himatsingka Seide reported a Q3 FY26 consolidated revenue of ₹637.26 crores, marking an 11.74% YoY decline primarily due to tariff impacts. Despite this, the company saw ₹25 crores in other income from forex movements and maintained high spinning plant utilization. Management is strategically pivoting towards non-U.S. markets, focusing on India, and introducing new product verticals to leverage existing infrastructure and diversify revenue streams, anticipating margin normalization by FY27.

Highlights

  • Other income of approximately ₹25 crores primarily due to foreign exchange movements in Q3 FY26.

  • Spinning plant maintained high capacity utilization at 99% in Q3 FY26.

  • EU FTA and recent U.S. tariff revisions are expected to open new opportunities for expansion across major markets.

  • Company is introducing new product verticals to accelerate growth and diversify revenue streams.

  • Indian market continues to be a high priority, demonstrating consistent growth with a target of ₹400-500 crores in 2 years.

Concerns

  • Consolidated total revenue declined to ₹637.26 crores in Q3 FY26 from ₹722 crores in Q3 FY25, a YoY decline of 11.74%.

  • Revenue decline was primarily attributed to the overhang of tariffs during the quarter.

  • Sheeting and Terry Towel divisions experienced a 100-200 basis point correction in capacity utilization.

  • Q4 FY26 is not expected to see an immediate positive impact from the recently announced tariff reductions, as benefits require bilateral client discussions and apply to new orders.

Key financials

  1. Revenue ₹637.26 Cr -11.7%YoY
  2. Other Income ₹25 Cr
  3. Net Debt ₹2,480 Cr
  4. Spinning Plant Utilization 99%

What they filed

Q1 FY27: revenue down 5.4%, net profit down 54.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue694 692 657 657 630 −9%611 −12%617 −6%621 −5%
EBITDA139 112 118 121 99 −29%95 −15%50 −58%88 −27%
Net profit22 22 12 11 42 +94%8 −65%1 −88%5 −54%
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 Capex disclosed
    Our capex will not be altered any capexes on account of new product verticals will be within our annual maintenance capex buckets.
  • Debt Net ₹2,480 Cr
    Yes, sir, can you share your net debt numbers as on December 31? ... INR2,480 crores.

Guidance & targets

Profitability

  • Margin Normalization Profitability · FY27 · Medium confidence Normalized margins
    No. I think progressively going into the next year, margin should normalize. What I think will happen is as we have shared with you all earlier during the period of tariffs or at least a 50% regime. Obviously, we had to share in the pain, and we had given support to clients. We will have to conclude our negotiations with clients in order to get most of it back. And we feel that margin should normalize going into as we progress in FY '27.

    — Shrikant Himatsingka

Revenue Mix

  • U.S. Revenue Contribution Revenue Mix · next 18 to 24 months · High confidence Substantially below 50%
    But we feel U.S. will substantially -- will come down substantially below the 50% mark over the next 18 to 24 months is what we believe, if not earlier.

    — Shrikant Himatsingka

Revenue

  • India Market Revenue Revenue · next 2 years · High confidence ₹400-500 crores
    I think India should become approximately INR400 crores to INR500 crores market in the next, I would say, 2 years.

    — Shrikant Himatsingka

  • India Market Revenue (Old Target) Revenue · next 4-5 years · Medium confidence ₹800-1,000 crores
    Unfortunately, the market numbers for India is in context to a number that I put out there where I said that we'll be looking at approximately INR800 crores to INR1,000 crores from India over the next 4, 5 years, which I had said a year back.

    — Shrikant Himatsingka

Regulatory

  • EU FTA Implementation Regulatory · a few months · Medium confidence Comes into force
    Yes. So I think by the time the EU FTA comes into force, which will take, I guess, a few months.

    — Shrikant Himatsingka

  • U.K. FTA Implementation Regulatory · a few months · Medium confidence Comes into force
    And I guess the U.K. FTA is also work in progress and will come into force in a few months.

    — Shrikant Himatsingka

What to watch in Q4 FY26

Margin Normalization Progress

FY27
Current Margins affected by tariffs, Q4 not expected to see immediate release
Target Progressive normalization towards previous levels

Why it matters

Margin recovery is crucial for profitability after tariff impacts, and management has guided for normalization by FY27.

No. I think progressively going into the next year, margin should normalize... And we feel that margin should normalize going into as we progress in FY '27.

Risks & concerns

  • Overhang of tariffs impacting revenue

    high

    The decline in Q3 FY26 revenue was primarily due to the overhang of tariffs.

    Management acknowledged

  • Delayed realization of tariff reduction benefits

    medium

    Q4 FY26 will not see immediate positive impact from tariff reductions; benefits require bilateral client discussions and apply to new orders.

    Management acknowledged

  • Muted growth in sheeting products

    low

    Growth rates in sheeting are expected to be a little more muted due to global supply dynamics.

    Management acknowledged

Q&A highlights

4 direct, 1 evasive
Impact of US tariff reduction on margins and Q4 performance Partial
No. I think progressively going into the next year, margin should normalize. What I think will happen is as we have shared with you all earlier during the period of tariffs or at least a 50% regime. Obviously, we had to share in the pain, and we had given support to clients. We will have to conclude our negotiations with clients in order to get most of it back. And we feel that margin should normalize going into as we progress in FY '27. ... Yes. I mean I don't think Q4 will see any immediate release because the tariffs have just been announced.

Analysts sought clarity on immediate margin benefits from tariff reductions, but management indicated a delayed impact requiring client negotiations and no immediate Q4 benefit.

Asked by Yash Naik

Revenue guidance for FY27 Evasive
We don't unfortunately give guidances, but I will reiterate the fact that we are actively looking and seeing new product lines to accelerate our growth rates, and we will be doing so by leveraging our existing infrastructure that we possess.

Management declined to provide specific revenue guidance, emphasizing strategic initiatives like new product verticals instead.

Asked by Yash Naik

Domestic revenue contribution and US market share targets Direct
But we feel U.S. will substantially -- will come down substantially below the 50% mark over the next 18 to 24 months is what we believe, if not earlier. And we will continue to see India grow for us. I think India should become approximately INR400 crores to INR500 crores market in the next, I would say, 2 years.

Management provided specific targets for reducing US market dependency and growing the Indian market, indicating a clear strategic shift.

Asked by Yash Naik

Raw material sourcing strategy, specifically regarding US cotton Direct
No. So we don't source only from the U.S. There are some varietals of raw materials we source from the U.S. But we largely a lot of the cotton we use emanates from India. And going forward, we are not changing anything as such, we are adding to the existing portfolio of products we do.

Clarified that raw material sourcing is diversified, with a significant portion from India, and no major shift is planned despite tariff changes.

Asked by Aditya Singh

Quantification of EU market revenue targets Partial
Unfortunately, the market numbers for India is in context to a number that I put out there where I said that we'll be looking at approximately INR800 crores to INR1,000 crores from India over the next 4, 5 years, which I had said a year back. And I think that in the next 18 to 24 months, we should be in the INR400 crores to INR500 crores mark, vis-a-vis you -- I won't be able to put a number on it, but I do think it will be very substantial in terms of -- I mean not EU -- other jurisdictions non-U.S. will be very substantial over the next 18 to 24 months vis-a-vis our revenue mix.

Management provided specific India targets but was unable to quantify EU market targets, indicating less granular visibility or a broader 'non-US' strategy.

Asked by Aditya Singh

Net debt as of December 31, 2025 Direct
INR2,480 crores.

Provided a key financial metric for the quarter-end, important for assessing the company's leverage.

Asked by Bhavin Chheda

Immediate impact of 25% US duty removal on current shipments and margin benefits Partial
Yes, it would most definitely be a function of bilateral discussions with a concerned client. It is not auto as at least as far as Himatsingka is concerned, I can't speak for the rest of the industry. But the dialogue needs to take place. And it certainly will not be effective vis-a-vis shipments that land today. It will be effective for them, but our price revision will need to be discussed and will be for orders that are over and above what's currently in the system, most probably, but this has to be negotiated.

Clarified that tariff benefits are not automatic and require negotiation, impacting the timing and extent of margin improvement.

Asked by Bhavin Chheda

Strategy for leveraging cellulosic capabilities and diversifying beyond home textiles Direct
Yes. Cellulosic nearly means not manmade -- the non-mandate fibers, although we use some of it in certain products. But our focus is largely cotton and other cellulosic fibers. It could be viscose, it could be linen and so on. But what I was trying to essentially say, Prerna is, Himatsingka currently operates in the space of home textile solutions largely. And we have products which are bath product portfolio, our bedding products portfolio and our drapery and upholstery products portfolio. So these constitute our home textile solutions offerings. And going forward, our growth rates need to be recalibrated -- and we need as we think we need to align to the emerging realities, given the FDAs with major jurisdictions and given what transpired with the U.S. and the learnings from that, we think that we should be actually going to market with a broader range of products than just home textiles.

Management detailed their strategy to expand into new product verticals like apparel, fabric, and yarn solutions, leveraging existing infrastructure to drive growth beyond traditional home textiles.

Asked by Prerna Jhunjhunwala

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance Overview

Himatsingka Seide reported a consolidated total revenue of approximately ₹637.26 crores for Q3 FY26, a decline from ₹722 crores in the same period last year. This 11.74% year-over-year reduction was primarily attributed to the lingering impact of tariffs. Despite the revenue dip, the company recorded approximately ₹25 crores in other income, mainly from foreign exchange movements. Capacity utilization for the spinning plant remained strong at 99%, though sheeting and terry towel divisions saw a 100-200 basis point correction.

Strategic Shift: Diversification Beyond Home Textiles

The company is actively pursuing a strategy to diversify its product portfolio beyond traditional home textiles. Leveraging its existing infrastructure and capabilities in the cellulosic value chain, Himatsingka plans to introduce new product verticals, including apparel solutions, fabric solutions, and yarn solutions. This move aims to accelerate growth rates, reduce concentration risk, and tap into larger market pools where global trade is more substantial than in home textiles. Management emphasized that while home textiles will remain a major portfolio, dependence solely on it would be limiting.

Geographic Focus: India and Non-U.S. Markets

Himatsingka Seide is strategically reducing its reliance on the U.S. market, targeting its revenue contribution to fall substantially below 50% within the next 18 to 24 months. Concurrently, the Indian market remains a high priority, with a target to grow to approximately ₹400-500 crores within the next two years, an update from a previous target of ₹800-1,000 crores in 4-5 years. The company also anticipates substantial growth from other non-U.S. jurisdictions, particularly the EMEA region (Europe, Middle East, and Africa), driven by new opportunities arising from FTAs.

Tariff Impact and Margin Outlook

The overhang of tariffs significantly impacted Q3 FY26 revenues. While recent U.S. tariff reductions (from 50% to 18%) have been announced, management clarified that Q4 FY26 will not see an immediate positive impact. The benefits require bilateral discussions with clients and will primarily apply to new orders, not current shipments. The company expects margins to normalize progressively into FY27 as these negotiations conclude and new tariff structures take effect.

Raw Material Sourcing and Cost

Regarding raw material sourcing, Himatsingka does not exclusively source from the U.S.; a significant portion of its cotton emanates from India. Management stated that U.S. cotton is not cheaper than Indian cotton for the varietals they use, implying no cost advantage from shifting sourcing. The decision on cotton usage is more linked to product positioning and consumer preferences rather than cost benefits from U.S. tariffs.

Capital Allocation and Debt

As of December 31, 2025, the company's net debt stood at ₹2,480 crores. Management indicated that any capital expenditures for new product verticals would be accommodated within their existing annual maintenance capex buckets, suggesting no significant increase in overall capex. No specific details on gross debt, cost of debt, or shareholder returns (dividends/buybacks) were provided during the call.

Market Presence in India

In India, Himatsingka Seide operates with three brands—Himeya, Liv, and Atmosphere—catering to various price points and channels. The company primarily utilizes a Multi-Brand Outlet (MBO) presence rather than a Company-Owned, Company-Operated (COCO) store strategy, favoring an asset-light model. Its distribution spans MBOs, large format stores, hospitality, B2B, e-commerce, and quick commerce platforms, ensuring a wide reach across the country.

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