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    Sangam (India) Limited

    SANGAMIND
    Textiles·11 Nov 2025
    Management Summary

    Sangam India reported a robust Q2 FY26, with revenue growing 16% year-on-year to INR 785 crores and EBITDA increasing 32% to INR 76 crores, driven by operational efficiencies and better product realizations. EBITDA margins expanded by 120 basis points to 9.6%, resulting in a net profit of INR 23 crores. The company has completed its extensive capex cycle and expects sustained profitability, despite a one-time impact from a change in depreciation policy.

    Highlights

    5

    • Revenue of INR 785 crores, up 16% YoY, driven by higher volumes and improved product mix.

    • EBITDA increased by 32% YoY to INR 76 crores, with margins expanding by 120 basis points to 9.6%.

    • Net profit for the quarter was INR 23 crores, reflecting strong operating performance.

    • Yarn prices have bottomed out, and there is an uptick in realizations.

    • Extensive capex cycle is completed, with all capacities now up and running.

    Concerns

    2

    • Depreciation policy change had a one-time impact of approximately INR 9 crores on PAT.

    • ROE is currently low, though management expects it to improve with sustained PAT growth.

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹785 Cr+16%YoY
    2. 02EBITDA₹76 Cr+32%YoY
    3. 03EBITDA Margin9.6%
    4. 04EBITDA Margin Expansion120 bps
    5. 05Net Profit₹23 Cr

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Debt disclosed

    Cost 6.8%

    Guidance & targets

    11
    CategoryTargetPriority
    Revenue
    Revenue Growth
    12-15%
    		High
    Revenue
    Revenue Growth
    12-15%
    		High
    Profitability
    EBITDA Margin Improvement
    1-2%
    		Medium
    Profitability
    EBITDA Margin
    11-12%
    		Medium
    Profitability
    PAT
    sustained
    		High
    Profitability
    ROCE
    12-18%
    		Medium
    Debt
    Debt Reduction
    INR 350 crores
    		High
    Power Costs
    Annual Savings from Captive Power
    INR 10 crores
    		High
    Renewable Energy
    Share of Renewable Energy
    70-75%
    		High
    Capacity Utilization
    Garment Division Capacity Utilization
    60-65%
    		High
    Capacity Utilization
    Overall Capacity Utilization for INR 4000 crores turnover
    90%
    		Medium

    Garment Division Capacity Utilization

    next quarter
    Current35%
    Target60-65%

    Why it matters

    Improvement in garment capacity utilization is key to driving revenue and profitability from this segment.

    I do feel that these capacity utilization should touch about 60%, 65% maybe by next quarter.

    How to verify

    guidance_and_targets[metric='Garment Division Capacity Utilization']

    Risks & concerns

    4
    RiskSeverity

    Cotton price volatility

    Management stated that cotton price movements are the nature of the business, mitigated by stocking and order books, with a maximum 30-45 days risk. — Analyst acknowledged

    medium

    US market tariffs and demand challenges

    Management believes the company is not directly or indirectly affected by US tariffs, as goods are shipped via other competitive nations like Bangladesh or African nations. — Management downplayed

    low

    Uncertainty of import duty exemption extension

    The import duty exemption is currently valid only until December 31, 2025, with no further updates on its extension. — Analyst acknowledged

    medium

    Pricing pressure from peers

    Management believes they are well-placed and do not foresee significant pricing pressure from peers, as there isn't much capacity being added in the textile sector currently. — Analyst downplayed

    low

    Q&A highlights

    8

    “And as far as the product mix is concerned, that is a continuous process. We are always looking for producing those products, which are yielding higher margins and maybe producing those products lesser, which are not so profitable. So that is a continuous process. There's nothing that I have to add on that, any particular product that is leading to this. It is the overall business and across all the verticals, we are working on the product mix that is enabling these -- the growth.”

    Analyst sought clarity on the drivers of revenue growth and margin expansion, specifically asking about product mix and realizations.

    asked by Raman KV

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q2 FY26 Performance Driven by Volumes and Product Mix

    Sangam India delivered a robust performance in Q2 FY26, with revenue growing 16% year-on-year to INR 785 crores. This growth was primarily attributed to higher sales volumes and an improved product mix. EBITDA increased significantly by 32% year-on-year to INR 76 crores, leading to a 120 basis points expansion in EBITDA margins to 9.6%. The company reported a net profit of INR 23 crores for the quarter, underscoring its improved operating efficiency.

    02

    Completion of Capex Cycle and Focus on Utilization

    The company has completed its extensive capital expenditure cycle over the past couple of years, with all new capacities now fully operational. Management indicated that there are no major new capex plans in the near future, with the focus shifting to maximizing profitability from existing assets. Ongoing modernization and maintenance capex is expected to be in the range of INR 50-70 crores annually.

    03

    Depreciation Policy Change and PAT Sustainability

    Sangam India revised its depreciation policy during the quarter to align asset useful lives with economic realities, resulting in a one-time📎 impact of approximately INR 9 crores on PAT. Despite this, management expressed confidence in sustaining PAT going forward⏳, anticipating that continued expansion in EBITDA margins will offset the one-time📎 effect of the depreciation change.

    04

    Debt Management and Cost Efficiency

    The company's cost of debt is currently favorable, ranging roughly between 6.75% and 7%. Sangam India is committed to debt reduction, with annual repayments of INR 100-120 crores. Management projects a total debt reduction of approximately INR 350 crores over the next three years, assuming no new major capex.

    05

    Strategic Shift Towards Renewable Energy and Cost Savings

    Sangam India is actively pursuing sustainability initiatives, including a significant investment in renewable energy. A 12-megawatt captive renewable power project is expected to commence delivery in December, projected to generate annual savings of INR 10 crores. The company aims to increase its renewable energy share from the current 15% to 70-75% over the next 15-18 months.

    06

    Market Outlook and Capacity Utilization Targets

    Management noted that yarn prices have bottomed out and are showing an uptick, contributing to better realizations. The company is targeting significant improvements in capacity utilization, particularly in the garment division, aiming to reach 60-65% by the next quarter from the current 35%. Overall, the company expects to achieve around 90% utilization to support a INR 4,000 crore turnover.

    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.