Sanathan Textile

Sanathan Textiles delivered a resilient operational and financial performance in Q4 FY26. Consolidated revenue grew 59.7% YoY to INR 1,169.2 crores, while consolidated EBITDA increased 38.1% YoY to INR 94.4 crores. Consolidated EBITDA margins improved significantly to 8.1% in Q4 FY26 from 5.3% in Q3 FY26, reflecting progressive operational stabilization at the Punjab facility.

A key milestone was the successful commissioning and ramp-up of Phase 1 at the Punjab manufacturing facility, which contributed significantly to the Q4 FY26 performance. The facility has received positive customer response, adding new clients and strengthening the company's footprint in the North India textile market. Management noted that the Punjab facility's products are tuned to North Indian market requirements, differing slightly from Silvassa's export-oriented focus.

For FY27, Sanathan Textiles projects consolidated revenue of INR 5,600-5,700 crores and EBITDA north of INR 500 crores, aiming for double-digit EBITDA margins. This growth is expected to be driven by the full operationalization of the Punjab facility (contributing INR 2,600 crores) and continued strong performance from Silvassa (targeting INR 3,100 crores). The company anticipates improved operational efficiencies and better absorption of depreciation and interest costs.

The company is actively pursuing further expansions. Technical yarn capacity at Silvassa is being doubled from 9,000 to 18,000 metric tons per annum, expected to contribute INR 150 crores in revenue. Phase 2 of the Punjab facility is targeted for completion by the end of FY27. Additionally, a cotton yarn expansion in Madhya Pradesh, with 72,000 spindles, is planned, with land acquisition completed for INR 26 crores, and production expected to commence 10-12 months after ground work starts by calendar year-end.

As of March 31, 2026, net debt stood at INR 1,325 crores, with gross debt at INR 1,500 crores, which management considers its peak level. The average cost of debt is approximately 7.25%, factoring in trade payables and LCs. The company plans annual debt payouts of INR 100-125 crores. Sanathan Textiles is also investing in a 32 MW hybrid solar project with Serentica, expecting a payback period of about three years, which will help reduce power costs.

Raw material volatility, particularly in crude-linked polyester and cotton prices, remains a key monitorable. While short-term volatility can impact margins, the company has been able to pass on cost increases over time. The global geopolitical environment continues to be fluid, affecting demand, logistics, and energy prices. However, business sentiments improved in H2 FY26, especially for export-oriented segments, supported by easing tariff uncertainties and potential India-UK and India-EU trade agreements.