Sanathan Textiles Ltd - Q1 FY27 Earnings Call Summary Tuesday, August 4, 2026 · 4:00 PM IST
Event Participants
Executives
4 Paresh V. Dattani (Chairman and Managing Director), Sammir D. Dattani (Executive Director), Sanjay Shah (CFO), Jude Patrick Dsouza (Company Secretary and Compliance Officer)
Analysts
5 Amit Kumar (Determined Investor), Charchit Maloo (Genuity Capital), Parth Sodha (Trinetra Asset Managers), Raman KV (Sequent Investments), Sagar Tanna (Alchemie Ventures)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Standalone Revenue | ₹813.13 crores | +8.43% YoY; +8.01% QoQ, driven by improved spreads and product mix |
| Standalone EBITDA | ₹94.93 crores | +35.52% YoY; +15.10% QoQ; margin expanded 233 bps YoY to 11.67% |
| Standalone PAT | ₹64.95 crores | +37.64% YoY; +16% QoQ; PAT margin 7.99%; EPS ₹7.7 |
| Consolidated Revenue | ₹1,334.74 crores | +79.08% YoY; +14.16% QoQ, driven by full quarter Punjab contribution and higher selling prices |
| Consolidated EBITDA | ₹108.08 crores | +55.38% YoY; +14.46% QoQ; margin 8.10%, stable QoQ |
| Consolidated PAT | ₹23.82 crores | -41.1% YoY; +10.4% QoQ; PAT margin 1.78%; EPS ₹2.82; impacted by full depreciation and interest charges on Punjab |
| Sales Volume (Consolidated) | 1,00,000 metric tons | Silvassa: 54,000 MT; Punjab: ~46,000 MT |
| Technical Textiles Revenue | ₹33 crores | Q1 FY27; utilization at 94% |
| Punjab Capacity Utilization | ~80% | Targeting 85-90% in Q2 FY27; 95-96% thereafter |
| Depreciation (Consolidated) | ₹34.7 crores | Up from ₹11.7 crores YoY due to Punjab commissioning |
| Finance Cost (Consolidated) | ₹38.6 crores | Up from ₹4.62 crores YoY as interest is now charged to P&L |
Geographic & Segment Commentary
Silvassa Facility (Standalone): Revenue at ₹813.13 crores with EBITDA margin improving to 11.67%, supported by disciplined raw material procurement and favorable product mix. EBITDA per ton stood at ~₹11,000 (mix of polyester, cotton, and technical yarns). Technical textiles capacity at Silvassa is being doubled from 9,000 to 18,000 MTPA, with commercial production expected imminently; utilization at the existing line was ~94%.
Punjab Facility: Revenue contributed ~₹550 crores in Q1 with EBITDA of ~₹12 crores as the plant ramps up. Polymerization capacity is at 700 MT/day with Q1 utilization of ~80%, targeting 85-90% in Q2 and ~95-96% in Q4 FY27. The facility operated through the quarter without interruption during the West Asia supply disruption. EBITDA per ton target of ~₹30,000 for the polyester filament segment is set for the next fiscal year.
Company-Specific & Strategic Commentary
- Punjab Phase 2 Expansion: On track for commissioning in Q1 FY28, increasing polymerization capacity from 700 MT/day to 900 MT/day, with phased ramp-up expected to take 1.5-2 quarters to full capacity.
- Technical Textiles Expansion: Plant and machinery installed at Silvassa to double capacity from 9,000 to 18,000 MTPA; commercial production imminent, with ~7,500 tons of incremental production expected during FY27.
- MP Cotton Yarn Greenfield Project: ₹400 crores capex planned for 72,500 spindles; expected asset turnover of 0.8-0.85x, translating to ₹350-375 crores incremental revenue.
- Renewable Energy: 32 MW hybrid wind-solar captive power arrangement being commissioned in phases; expected to meaningfully reduce power costs.
- Raw Material Sourcing: Silvassa uses ~60% imported PTA and 40% domestic contracted PTA; Punjab sourced entirely from IOCL Panipat. Company in talks with GAIL and IOCL Paradip for domestic supply as new capacities come online.
- Inventory Discipline: Polyester yarn finished inventory at 12-13 days, cotton at 7 days; raw materials held at 8-10 days.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY27 EBITDA | ₹520-540 crores (Consolidated) | Guidance maintained; anchored on Punjab ramp-up, technical textiles expansion, and improving demand |
| Punjab Utilization | 85-90% in Q2 FY27; 95-96% by Q4 FY27 | Phase 1 ramp-up trajectory on track |
| Punjab Phase 2 | Commissioning in Q1 FY28; 900 MT/day capacity | Phased ramp-up over 1.5-2 quarters to full utilization |
| Technical Textiles | ~7,500 MT incremental production in FY27 | From 9,000 MTPA additional capacity being commissioned |
| FY28 Punjab EBITDA per ton | ~₹30,000 | Target for polyester filament segment at full utilization |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Price Volatility | West Asia geopolitical tensions disrupted PTA/MEG markets and cotton prices; while conditions normalized from June, ongoing geopolitical fluidity could impact spreads, demand deferrals, and input costs |
| Raw Cotton Supply Risk | Government waived 11% customs duty on cotton imports effective June 1, 2026; climate-related disruption globally remains a key monitorable for the coming season |
| Demand Deferral | April-May saw buyers defer purchases awaiting price stability; demand recovery began in June but sustainability into Q2 remains a watch item |
| PTA Import Dependence | India still imports ~20 million tons of PTA annually; GAIL facility commissioning in current quarter and IOCL Paradip by year-end expected to reduce dependence but contracts not yet finalized |
| Operational Ramp-up Execution | Full depreciation and finance costs on Punjab now hit the P&L, pressuring consolidated PAT; execution risk on margin recovery at full utilization |
Q&A Highlights
Punjab Facility Margins and Ramp-up
- Question: Did Punjab do ₹500 crores revenue with ₹24-25 crores EBITDA? At what revenue scale can Punjab hit 11-12% EBITDA margin? (Sagar Tanna)
- Answer: Revenue was ~₹550 crores with EBITDA of ~₹12 crores. Management guided to evaluate Punjab on EBITDA per ton basis, targeting ~₹30,000/ton next year. The Silvassa blended EBITDA per ton was ~₹11,000, but that includes polyester, cotton, and technical yarns, whereas Punjab's ₹30,000 target is only for polyester filament. (Paresh Dattani)
Technical Textiles Expansion
- Question: What was technical textiles revenue and utilization in Q1? When will new capacity contribute? (Charchit Maloo)
- Answer: Revenue was ₹33 crores with utilization at 94%. The second phase (9,000 MTPA additional) is being commissioned now; expected incremental production of ~7,500 tons over last year's capacity during FY27. (Paresh Dattani)
Punjab Phase 2 Timeline
- Question: Is the Phase 2 target for FY28 intact? What utilization trajectory for Phase 1? (Charchit Maloo)
- Answer: Phase 2 commissioning remains on track for Q1 FY28, moving from 700 MT/day to 900 MT/day. Phase 1 utilization is at 80% currently, targeting 85-90% in the coming quarter and 95-96% thereafter. (Paresh Dattani)
MP Greenfield Cotton Project
- Question: What is the planned capex and expected asset turnover for the MP cotton plant? (Raman KV)
- Answer: Capex of ₹400 crores for 72,500 spindles; expected asset turnover of 0.8-0.85x, generating ₹350-375 crores incremental revenue. (Paresh Dattani)
Spreads and Inventory
- Question: How did spreads move sequentially and what are inventory days? (Raman KV)
- Answer: Spreads improved across all three verticals from Q4 to Q1, though individual figures were not disclosed. Polyester finished inventory held at 12-13 days; cotton at 7 days; raw material at 8-10 days. (Paresh Dattani, Sammir Dattani)
Demand Outlook and FY27 Guidance
- Question: How is demand in July-August? Is FY27 EBITDA guidance of ₹500+ crores maintained? (Parth Sodha)
- Answer: Demand expected to improve through the quarter, particularly from end-August to end-September. FY27 EBITDA guidance maintained at ₹520-540 crores. (Paresh Dattani)
PTA Availability and Domestic Sourcing
- Question: What is the PTA/MEG availability situation and have you tied up long-term contracts with GAIL/IOCL? (Amit Kumar)
- Answer: Availability remains tight; India imports ~20 million tons of PTA annually. GAIL facility commissioning this quarter and IOCL Paradip by year-end will reduce import dependence. Company is in discussions with both but cannot finalize contracts until they begin production; currently Silvassa sources 60% imported/40% domestic, Punjab entirely from IOCL Panipat. (Paresh Dattani)
Key Takeaway
Sanathan Textiles delivered steady Q1 FY27 results against a backdrop of severe raw material price volatility triggered by West Asia geopolitical tensions, with consolidated revenue growing 79.08% YoY to ₹1,334.74 crores and consolidated EBITDA up 55.38% to ₹108.08 crores. The company maintained FY27 EBITDA guidance of ₹520-540 crores, anchored on Punjab ramp-up (80% utilization, targeting 95-96% by Q4), the Silvassa technical textiles expansion (9,000 to 18,000 MTPA), and improving demand from June. Consolidated PAT of ₹23.82 crores was suppressed by full depreciation (₹34.7 crores) and finance costs (₹38.6 crores) on Punjab, though standalone PAT grew 37.64% to ₹64.95 crores. Strategic priorities include commissioning Phase 2 of Punjab (900 MT/day by Q1 FY28), the ₹400 crores MP cotton yarn project, and a 32 MW renewable power arrangement. Key watch points remain raw material price stability, PTA domestic supply availability as GAIL/IOCL capacities come online, and execution of the technical textiles ramp-up.
Transcript incomplete - Q&A section includes all questions from the call; no sections missing.