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Spunweb Nonwoven Ltd — Q4 FY26 earnings call

Call held 16 May 2026

Management summary

SPUNWEB reported strong financial performance in FY26, driven by significant revenue and profit growth, alongside strategic capacity expansion and green energy initiatives. The company commissioned new production lines and a solar power plant, enhancing operational efficiency and product offerings. While facing challenges like stretched working capital and market uncertainties for new product development, management remains focused on leveraging India's growing hygiene market and diversifying its product portfolio.

Highlights

  • Consolidated revenue from operations grew by 22.22% year-on-year to ₹324.48 crores in FY26.

  • EBITDA increased by 39.80% to ₹55.98 crores in FY26.

  • Profit after tax (PAT) stood at ₹23.07 crores, reflecting a robust 54.73% growth over FY25.

  • New 3.2-meter single S and 1.6-meter single S production lines commissioned, expected to generate approximately ₹80-85 crores in yearly revenue.

  • 6.5 megawatt ground-mounted solar power plant commissioned, contributing to 50% reduction in electricity unit usage and supporting decarbonization.

Concerns

  • Working capital stretched with receivable days increasing to 78-79 days due to new customer credit terms and raw material procurement.

  • Market uncertainty from trade wars and geopolitical situations makes entering new value-added product lines difficult, especially for export-focused products.

  • High cost of biodegradable raw materials (PLA) currently limits their adoption, despite sustainability benefits.

Key financials

2 periods

Headline

  • Revenue from Operations
    ₹324.48 Cr
    YoY +22.2%
  • EBITDA
    ₹55.98 Cr
    YoY +39.8%
  • EBITDA Margin
    17.3%
  • PAT
    ₹23.07 Cr
    YoY +54.7%
  • PAT Margin
    7.1%

H2

  • FY26 Revenue
    ₹188.08 Cr
  • FY26 PAT
    ₹12.33 Cr

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue103 107 105 141
EBITDA11 16 17 21
Net profit3 5 7 9
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.

Segment breakdown

SegmentRevenue ContributionMargin Profile
Hygiene Sector50%Higher qualitative
Packaging & Commercial Sector29%Medium qualitative
Other Sectors (e.g., Agriculture)20%Lower qualitative

Capital allocation

high confidence
  • Capex Capex disclosed
    • Commissioning of 3.2-meter single S and 1.6-meter single S production lines
    • Installation of 6.5 megawatt ground-mounted solar power plant
    We recently commissioned our 3.2-meter single S line and 1.6-meter single S production lines, enhancing our ability to meet rising demand. In line with our commitment to sustainability and cost efficiency, we have also commissioned 6.5 megawatt of ground-mounted solar power plant across the group, in addition to our rooftop installation.
  • Debt Debt disclosed
    With a comfortable net debt-to-EBITDA ratio, a strong net worth position, we believe Spunweb is well-positioned to capitalize on structural volume growth in the non-woven fabric market, both in India and globally.
  • M&A Spunweb India Private Limited Acquisition · Closed

    Corporate evolution and transition into a publicly listed company.

    In 2025, we successfully completed the acquisition of Spunweb India Private Limited, formerly a partnership firm, and transitioned into a publicly listed company, a major milestone in our corporate evolution.
  • M&A Cigate Consumer Private Limited Acquisition · Closed

    To explore the B2C segment and cater to export clients for end consumer products.

    So, in terms of Cigate Consumer Private Limited, so that is, Spunweb Nonwoven Limited is having 51% of the stake into that company. ... In order to explore the B2C segment, we are dealing with the Cigate and procurement of these end products and selling it to the export market.

Guidance & targets

Revenue

  • Yearly Revenue from New Production Lines Revenue · yearly basis · High confidence ₹80-85 Crores
    So, we have installed two, this new line. One is 3.2 Single S, and one is 1.6 Single S line. That will give us a revenue of approximately 80 to 85 Crores on a yearly basis.

    — Kishan Kagathara

Capacity Utilization

  • Utilization of Lines 6 & 7 Capacity Utilization · by Q4 FY27 · High confidence 80-85%
    So, that would be around one and a half year, one or one and a half year. We tried to make it before that, but to be on a practical side, it would take around one and a half year to reach up to 80% or 85% of the capacity utilization. ... So, you can for both lines, by Q4 of FY27, we should be expecting them to reach, 80% utilisation.

    — Kishan Kagathara

Margin

  • Overall Margin Increment from New Lines and Solar Plant Margin · this year · Medium confidence Slightly increased
    So, altogether, the margin would be slightly increased from what we are experiencing this year.

    — Kishan Kagathara

Subsidy

  • Capital Investment Subsidy Rate Subsidy · High confidence 20%
    So, it is 20% on the capital investment, capital subsidy, and it is also, government is providing benefit onto the PGVCL electric unit rate, it is 1 per 15%.

    — Kishan Kagathara

Market Growth

  • Indian Non-Woven Fabric Demand CAGR Market Growth · High confidence 11%
    And to give you a number of the growth percentage of Indian non-woven fabric demand, then it is growing with the 11% of CGAR rate.

    — Kishan Kagathara

Revenue Growth

  • Revenue Growth Rate Revenue Growth · 1-2 years · Medium confidence Maintain current growth
    going forward for, let's say, 1 or 2 years, we can say that we will try to maintain the revenue growth by what we are seeing this year, and we will try to make it slightly higher into the PAT margin in upcoming one to two years.

    — Kishan Kagathara

Profitability

  • PAT Margin Profitability · 1-2 years · Medium confidence Slightly higher
    going forward for, let's say, 1 or 2 years, we can say that we will try to maintain the revenue growth by what we are seeing this year, and we will try to make it slightly higher into the PAT margin in upcoming one to two years.

    — Kishan Kagathara

What to watch in Q1 FY27

Capacity Utilization of Lines 6 & 7

next 1-1.5 years (by Q4 FY27)
Current 17% and 22%
Target Progress towards 80-85%

Why it matters

Tracking the ramp-up of new capacity is crucial for future revenue growth and operational efficiency.

So, that would be around one and a half year, one or one and a half year. ... So, you can for both lines, by Q4 of FY27, we should be expecting them to reach, 80% utilisation.

Risks & concerns

  • PP Price Volatility

    medium

    Polypropylene (PP) prices are volatile, but management states that price increases are passed through to customers, mitigating direct impact on margins.

    Analyst acknowledged

  • Market Uncertainty for New Value-Added Products

    medium

    Trade wars and geopolitical situations (e.g., Iran) create an unpredictable market, making it difficult to enter new value-added product lines, especially those focused on exports.

    Management acknowledged

  • Stretched Working Capital / Receivable Days

    medium

    Receivable days have increased to 78-79 days due to new hygiene customers receiving 90-day credit terms and the need for raw material procurement for increased capacity.

    Analyst acknowledged

  • High Cost of Biodegradable Materials

    low

    Oxo-biodegradable materials are available but not widely adopted due to high cost and side effects, limiting their current use in products like diapers.

    Analyst acknowledged

Q&A highlights

8 direct
Discrepancy in EBITDA/PAT Margin Reporting Direct
Our EBITDA increased by 39.80% to 55.98 crores, with the margins expanding 149 basis point to 7.11 percentage.

The transcript contains a clear typo, stating EBITDA margin expanded to 7.11%, which is actually the PAT margin. The calculated EBITDA margin is 17.25%.

Asked by Moderator

Revenue and Margin Contribution from New Production Lines Direct
So, we have installed two, this new line. One is 3.2 Single S, and one is 1.6 Single S line. That will give us a revenue of approximately 80 to 85 Crores on a yearly basis. ... So, altogether, the margin would be slightly increased from what we are experiencing this year.

Clarifies the direct financial impact of recently commissioned capacity on future revenue and profitability.

Asked by Archit Agarwal

PP Price Volatility and Pass-Through Mechanism Direct
So, basically, with all our customers, we are understanding that all the PP volatility will be passed to the customer and that is directly given to the customer. ... Otherwise, the market is running on a stable basis.

Addresses a key sector risk (raw material price volatility) and confirms a robust pass-through mechanism, mitigating margin risk.

Asked by Anant Jain

Sourcing Strategy for Production Lines (China vs. Europe) Direct
So, there are several different types of non-woven fabrics are there out of which we are catering to a particular segment called spun bond. ... But when we talk about the spunbond category, majority people prefer to have Chinese because of the low investment cost, because you have a variety of sectors to cater.

Explains the strategic rationale behind choosing Chinese manufacturing lines over European ones, linking it to specific product categories and cost efficiency.

Asked by Anant Jain

Timeline for Capacity Utilization Ramp-up for New Lines Direct
So, that would be around one and a half year, one or one and a half year. ... So, you can for both lines, by Q4 of FY27, we should be expecting them to reach, 80% utilisation.

Provides a clear timeline for achieving optimal utilization of newly commissioned production lines, crucial for future revenue and profitability.

Asked by Anant Jain

Increase in Receivable Days and Working Capital Stretch Direct
That has also gone up because we are utilizing our underutilized capacity and credit. Because all the hygiene customers start with the 90 days credit. ... So that's why you are seeing around 78 to 79 days of the credit period.

Highlights a potential working capital concern and provides specific reasons, including customer credit terms and raw material procurement.

Asked by Anant Jain

Margin Profile of Different Product Lines Direct
It's a medium margin product for the packaging sector, I would say. ... So, basically, it would be lower, around 1% from what we are seeing overall, around 1% or 1.5% from what we are having in the full-year consolidation.

Provides granular insight into the profitability differences across product segments, aiding in understanding blended margins.

Asked by Mahesh Attal

Strategy for Future Expansion and Funding Direct
So, always, we keep, let's say, 3 or 4 production lines into our mind, and we always try to deliver more than what we commit. ... And government is benefiting this sector by, availing the subsidy. So, in order to avail that subsidy, we need to have a bank loan.

Outlines the company's approach to future capacity expansion, emphasizing demand-driven decisions, profitability, and leveraging government subsidies and bank loans for funding.

Asked by Jigar

2 min read 6 chapters

Detailed narrative

Strong Financial Performance in FY26

Spunweb Nonwoven Limited reported a robust financial year 2026, with consolidated revenue from operations growing by 22.22% year-on-year to ₹324.48 crores. EBITDA increased significantly by 39.80% to ₹55.98 crores, resulting in a calculated EBITDA margin of 17.25%. Profit after tax (PAT) also saw substantial growth of 54.73% over FY25, reaching ₹23.07 crores, with the PAT margin expanding by 149 basis points to 7.11%.

Strategic Capacity Expansion and Green Initiatives

The company expanded its manufacturing footprint by commissioning new 3.2-meter single S and 1.6-meter single S production lines, which are expected to contribute approximately ₹80-85 crores to yearly revenue. These lines are dedicated to the packaging sector and are anticipated to yield slightly higher margins. Additionally, Spunweb commissioned a 6.5 megawatt ground-mounted solar power plant, which is projected to reduce electricity unit usage by 50%, contributing to both cost efficiency and sustainability goals.

Product Portfolio and Market Focus

Spunweb's revenue is primarily driven by the hygiene sector, contributing over 50%, followed by packaging and medical applications. The company offers 6 key fabric types, including hydrophilic, hydrophobic, and UV-treated. While the hygiene sector commands higher margins, packaging and agriculture sectors offer medium to lower margins, respectively. The management noted a strong focus on the Indian hygiene market due to increasing awareness and government initiatives, while new export market exploration is currently on hold due to global uncertainties.

Capacity Utilization and Expansion Outlook

The newly commissioned Lines 6 and 7, currently at 17% and 22% utilization, are projected to reach 80-85% utilization within 1 to 1.5 years, specifically by Q4 FY27. Future expansion plans, such as a potential Line 8, will be decided based on specific sector demand, profitability, and the utilization of existing capacity. The company benefits from government subsidies in the technical textiles sector, including a 20% capital investment subsidy and benefits on electricity rates, which can support future growth funded by bank loans.

Working Capital and Raw Material Management

The company's working capital has seen some stretching, with receivable days increasing to 78-79 days. This is attributed to the 90-day credit terms offered to new hygiene customers and the need for raw material procurement for increased production. Spunweb manages polypropylene price volatility by passing it directly to customers. Raw material sourcing is diversified, with a 50-50 split between domestic suppliers (like Reliance, IOCL, with 1-year MOUs) and international spot purchases, allowing flexibility during market fluctuations.

Strategic Acquisitions and B2C Exploration

In 2025, Spunweb successfully acquired Spunweb India Private Limited, marking a significant corporate evolution. More recently, the company acquired a 51% stake in Cigate Consumer Private Limited. This acquisition is strategic for exploring the B2C segment, with Cigate dedicated to serving export clients by procuring end consumer products and selling them to international markets, leveraging Spunweb's existing relationships with hygiene product manufacturers.

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