Himatsing. Seide

Himatsingka Seide reported a consolidated total income of INR721 crores for Q4 FY26, marking a moderate growth of approximately 5.8% compared to INR681 crores in the same period last year. The fiscal year 2026 was characterized by volatility due to U.S. tariff policies, heightened geopolitical uncertainties, supply chain disruptions, and pricing pressures. Q4 capacity utilization was mildly impacted, with spinning at 99%, sheeting at 56%, and Terry Towel at 63%, partly due to delays in outbound shipments to certain jurisdictions.

The company is undergoing a significant transition to diversify its revenue and category mix beyond home textiles. This involves exploring yarn solutions, fabric solutions, advanced fabric solutions, and apparel solutions. The aim is to leverage existing infrastructure and capabilities to address larger market pools, reduce concentration risk across client and geography bases, and improve pricing power, which has been challenged in the home textile space. This transition is expected to materialize in a more material format starting H2 FY27.

Management emphasized that the expansion into new product verticals (yarn, fabric, apparel) will primarily leverage the company's existing manufacturing facilities, which include the world's largest cotton spinning facility with 211,584 spindles. This strategy avoids significant new capital expenditure, focusing instead on optimizing current assets. At optimal capacity utilization, the existing infrastructure is projected to deliver a top line of approximately INR4,000 crores and EBITDA of INR700-800 crores, expected to be achieved within 18 to 24 months.

The company's net debt currently stands at approximately INR2,550 crores. A key capital allocation priority is to reduce this to around INR2,000 crores within the next 12 months. Initiatives include a QIP of INR400 crores in FY25 and the recent Board approval to raise up to INR850 crores through senior secured redeemable non-convertible debentures. These actions are aimed at balancing debt tenors and improving the overall leverage profile.

Despite ongoing geopolitical uncertainties, the company remains cautiously optimistic about navigating the evolving environment. The Middle East overhang is expected to impact Q1 FY27 shipments. Himatsingka Seide is also focusing on enhancing its position in the Indian market, which contributed just over INR100 crores in FY26. This domestic growth is expected to improve further and will encompass new categories, not just home textiles, as India becomes an integral part of the revenue mix.

While Q4 FY26 saw some short-term margin pressure due to tariff overhang and inflationary impacts from the Middle East war, management reiterated its medium-term EBITDA margin outlook of 18% to 22%. The new business verticals are expected to have comparable margin profiles to the existing home textile business, ensuring that diversification does not dilute overall profitability.