GHCL Textiles Ltd (NSE: GHCLTEXTIL) Q4 2025 Earnings Call dated May. 05, 2025
Corporate Participants:
Unidentified Speaker
Ravi Shanker Jalan — Non-Executive Director
Marshal Rajendrakumar Sonavane — Chief Executive Officer – Designate
Analysts:
Unidentified Participant
Garima Singla — Analyst
Jatin Damania — Analyst
Resham Jain — Analyst
Raman KV — Analyst
Amit Khetan — Analyst
Amey Chheda — Analyst
Lakshminarayanan — Analyst
Aditya Sen — Analyst
Presentation:
operator
Ladies and gentlemen, you have been connected to the GHCL Textiles Limited conference call. Please stay connected. The call will begin shortly. Participants, you have been connected to the GHCL Textiles Limited conference call. Please stay connected. The call will begin shortly. Thank you.
Ladies and gentlemen, good day and welcome to The GHCL Textiles Limited Q4 and FY25 earnings conference call hosted by Goindia Advisors.
As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the Star then zero on your touchstone phone.
I now hand the conference over to Ms. Ganima from GoIndia Advisors. Thank you. And over to you, ma’am.
Garima Singla — Analyst
Thank you, sir. Good afternoon everyone. A very warm welcome to everyone attending. To ghcn Texas quarter four and financial. Year 25 earnings conference call. We have with us on the call. Today the senior management of BHC and Textiles.
Please note that the discussion on today’s call may include certain forward looking statements. And must be therefore viewed in conjunction. With the risks that the company faces.
I now hand over the call to Mr. I. Jalan for his opening remarks. Thank you. And over to you, sir.
Ravi Shanker Jalan — Non-Executive Director
Thank you very much. Thank you very much. Good afternoon everyone and a very warm welcome to GSL Textiles Q4 and FY25 earnings conference call. I’m Ravi Jalan and I thank all you for joining us today to discuss our performance for the quarter and year ended 31st March 2025. We at GSL Textile extend our heartful prayers to the affected families from the recent tragic terror attack and wish for strength, healing and lasting peace.
Our results and investor presentation has been uploaded to the stock exchanges and company website. I am pleased to be joined by our leadership team including Mr. Raman Chopra and Mr. Manu Jain. I would like to take a moment to introduce our new member who has recently come on board. I am delighted to welcome Mr. Marcel Sonawale who has joined us as a CEO designate. Marcel brings with him a wealth of experience and strategic insights and we are confident that his leadership will be instrumental as we steer GSL Textile into the next phase of growth and transformation.
At this juncture, I would also like to express my heartfelt gratitude to Mr. Bala, our ongoing CEO, for his dedicated leadership and invaluable contribution to GSL Textile over the years. We thank him for his commitment and wish him all the very best in his future endeavors.
With that, I would request Mr. Marcel to take you through the Key Highlights of the Quarter and Full Year before we open the floor for questions, Mr. Marcel.
Marshal Rajendrakumar Sonavane — Chief Executive Officer – Designate
Thank you for the warm welcome. It’s a privilege to address you today for the first time as part of GHCL leadership team. Having spent considerable time in the textile sector, I’m excited to contribute to GHCL’s next phase of growth and value creation. I look forward to working closely with our talented teams, valued stakeholders and all of you as we continue to build a future ready and resilient textile business.
Let me now take you through the key highlights of our Q4 and full year FY25 performance. The textile sector continued to face sluggish demand during the quarter despite the challenging environment. I am pleased to share that our manufacturing facilities operated at optimum utilization levels demonstrating our strong execution capabilities and customer alignment. Reflecting on our Q4 performance, revenue stood at rupees 285 crores 285 crores which came in flat compared to previous periods. EBITDA for the quarter was rupees 32 crores which is an increase of 9% on a year on year basis and 24% on quarter on quarter basis.
For the full year FY25 our revenue came in at rupees 11. 68 crores marking a growth of 10% over FY24. EBITDA for the year was rupees 117 crores up 31% year on year. Also bad for the year was rupees 56 crores up 123% year on year basis. I would like to highlight that our full year EBITDA and PAT performance has significantly exceeded the levels achieved in FY24 despite the ongoing industry pressure. This resilience is a testament to our deep customer relationships, cost discipline and operational excellence.
The share of revenue from fabric increased from 6.5% in FY24 to 7.8% in FY25. Similarly, the share of exports has also increased from 15% noted in FY24 to 16% of revenues in FY25. Despite the strategic reduction of exports to Bangladesh, our strategic shift towards value added products continues and it continues to gain traction in the year.
We deployed rupees 158 crores towards growth capex mainly on the new spindles expansion while working capital was released by rupees 54 crores on account of battle inventory management and debt was reduced by rupees 8 crores. We maintain a robust balance sheet closing the year with a net debt of rupees 58 crores despite making significant investments
Turning to industry developments, the Indian textile industry is currently navigating a phase marked by both challenges and emerging opportunities. Cumulative cotton arrivals for the current season stood at 273 lakh bales compared to 258 lakh bales in the previous year. The Cotton Corporation of India CCI has been an active buyer having procured approximately 100 lakh bales as of March 25, up sharply from 33 lakh bales last season.
Domestic cotton prices are currently stable, averaging around Rs. 55,000 per candy, and international prices have also shown steady trends. We expect cotton prices to remain range bound in the near term, though there remains some degree of uncertainty stemming from evolving international trade and tariff dynamics.
On the global trade front, recent tariff adjustments by the US have introduced an element of unpredictability. However, this realignment may provide India with a strategic advantage as some of our key competitors face higher duties. For India to fully capitalize on this opportunity, the private sector will need to accelerate investments in capacity and capability building.
At ghcl, we are well positioned to lead in this evolving landscape. Our committed investment plan of Rupees 1000 crores remain firmly on track of which Rupees 500 crores have been deployed. The addition of 25,000 new spindles is progressing as scheduled and we expect operations to commence by June 25th. We also initiated a new project to install 40 knitting machines at our existing location with a total capex of rupees 38 crores.
Work on the first phase involving 10 machines is already underway. This forward integration will enable us to produce value added products using our own yarn, enhancing our margin profile as per our long term strategic vision, we will be investing in weaving and dye fabric capabilities to offer ready to cut fabric solutions to our customers.
With a strong balance sheet, low leverage and clear strategic priorities, we are confident of sustaining our current growth momentum and delivering value to all our stakeholders. Thank you once again for your continued support and belief in GHCL Textile. We are now welcoming any questions you may have.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press STAR and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Jatin from Swan Investments. Please go ahead.
Jatin Damania
Good afternoon sir and thank you for the opportunity. So Congress on a Good set of numbers. With a finally EBITDA margin crossing a double digit. So going ahead if just one want to understand in terms of the margin profile with our fabric sales also improving 100 bits on year, on year basis. So how shall one look at three to five years down the line the revenue outlook from the fabric sales versus yarn sales.
Ravi Shanker Jalan
Two things. First and foremost like we have already said in our earlier call that now the future investment we are only focusing towards the weaving and knitting side. And the journey is going to start this year with the 40 machines. Gradually we will be building these 40 machines during this year. And next year onwards we will be putting the money into the weaving side as well along with the processing.
We are just waiting for this PM Mitra park to start where we would like to have this processing unit installed. And overall we have said already that our turnover we are looking at two times of what is the turnover today. And out of the total Overall roughly around 30% will be coming from the value added of the knitting and the fabric or the weaving product. I hope I have been able to clarify your question.
Jatin Damania
Yeah, yeah. So 2, 10 of turnover of today and with 30% coming from the value added products. Right?
Ravi Shanker Jalan
Yes.
Jatin Damania
So if we look we are spending near about 1000 crore. So that will increase our spindle capacity from 202 lakhs to 225 by first quarter of FY26. Am I right?
Ravi Shanker Jalan
Yes, yes.
Jatin Damania
Will be the incremental revenue that will be coming from this 25,000 spindles.
Ravi Shanker Jalan
Approximately around 1 is to 1 approximate it will be roughly around 200, 250 crore kind of a number will be coming.
Jatin Damania
250 crore. And just secondly in month of March we discontinued our production edit at a cavalry section. So just wanted to understand what was the total expenses that we incurred for this section in FY25.
Ravi Shanker Jalan
You are talking about the discontinuation which has happened in the end of March. And basically we were incurring losses on this division or this unit. And broadly we have spent around 2 crore rupees. Sorry Manu, just one second. Jatin. The benefit of this we could see in the month of April the benefit has started coming in. Because what we have done Jatin, in the meantime out of this closure some of the machine we have used in the other unit. And by that we have increased our volume in that unit. And overall because of that the volume loss will not be that significant. And we have lost approximately around 2 crore rupees into that unit. And that will get converted into the positive in the 25, 26.
Jatin Damania
Started seeing. Since month of April, right?
Ravi Shanker Jalan
Yeah, you can say benefit we have started seeing in the month of April.
Jatin Damania
So second thing now if you look in terms of our return ratios, definitely we have started seeing an improvement in the margins. But when we compare ourselves with the peers in the industry in terms of roce we are at sharp lower single digit. So what are the steps the company is taking to improve the return ratio?
Ravi Shanker Jalan
First and foremost, as we discussed in the first point is that this integration will help us to kind of improve our return ratio. That is number one. Second, we are also taking some of the steps on our working capital management. You have seen in this quarter or in the 2425. We have released some of the working capital though cotton inventory. Your what you call your imported cotton inventory even on your. What you call on the finished goods inventory. So lot of work has been done on the inventory of working capital management.
Second, we have also been little more in terms of capital expenditure. If you look at this year, we are not talking about the big capital expenditure, the new capital expenditure we are not talking about. So that way we are trying to balance and try to improve upon on our capital what you call return on capital employed.
Jatin Damania
Last questions on my side, after wunhich I’ll come back on a queue. So when we integrated the presentation you indicated that the vertical integration and announcement of green energy we are seeing a long term EBITDA margin in the range of 17 to 20% which is almost double from the current level. So by when do we expect this EBITDA margin to reach? And secondly, just on the clarification of the cavalry section you indicated 2 crores loss which is on the quarterly basis or on the monthly basis.
Ravi Shanker Jalan
First, let me clarify this 2 crore loss which we have said is the last 24, 25. Second, you said about this long term vision of 17 18%. That means if you remember, if you look at our long term number you will find that we have been achieving this around 15, 16% EBITDA margin on a longer term basis. This is primarily because of the market conditions, the margins are down. And plus this vertical integration will also help us to improve.
We are very confident that you will start seeing this benefit. Maybe hopefully. Because we right now we can’t commit on the kind of a volatility we have in the market. You know, because of geopolitical, because of US tariff listing. But one of the things we become normal. Definitely we believe that this we will be able to deliver on that.
Second, like Marcel said in his statement I’m very optimistic that the outlook of the textile industry in medium terms because if you look at the tariffs the way it has been announced by the US the small advantage to India will definitely have a small. Even if a small portion of the volume shifting from other countries to India will definitely have a big what you call boost into the business of textile that will also bring some kind of a.
What you call good numbers for the textile purse overall.
Jatin Damania
Sisurat, have we seen any inquiry in terms of the order inflow? Because you indicated that tariff and Bangladesh disruption. So have we seen any inquiry of the order inflow during the last one month for the same?
Ravi Shanker Jalan
This is started just in initially and because of this 90 day pause period by the U.S. now the little bit of the people are wanting to wait that. Okay, let’s wait this in 90 days because after 90 days what will happen? Because by the time they give the order now this delivery will happen only after 90 days. Okay, so therefore they want to be little bit more clear on this 90 days period. But like you know that India looks to be the first mover onto the bilateral trade agreement with the US and that will definitely bring advantage to Indian particularly to the textile industry. I’m very hopeful.
Jatin Damania
Okay, thank you Jalandit for answering all the questions. Thank you and all the best.
operator
Thank you. The next question is from the line of Resham Jain from DHP Asset Managers. Please go ahead.
Resham Jain
Hi, good afternoon sir. So I have two, three questions. First is with respect to the current situation on the tariff and I presume that customers, global customers have already started inquiring about alternate source. So just wanted to hear your thoughts. What are you hearing from the market? And obviously we have announced capex on spinning billing processing but any plans to get into governmenting as well given that the largest value addition from this tariff seems to be helping governmenters more than other segments.
Ravi Shanker Jalan
As you rightly said in terms of overall what definitely we see is some kind of a positivity or some kind of inquiries are getting floated into the Indian market because all the major suppliers, be it China, Bangladesh, Vietnam, all other places the kind of challenges are being faced by the customers. So we see that kind of inquiry that we see that kind of a curiosity of the people to place order with us. But only because of this 90 days period, little bit conversion of the inquiry into the orders is getting a little longer time. That’s number one.
Second you said about this garden thing. See at this point of the time we don’t have any plan to go for a garden thing first we want to establish, you know, that past experience of our home textile. So we want to be first establish ourselves as a ready to cut fabric to be supplied to the garment manufacturer. Because that itself will be a big value creation. And once we stabilize in that, surely we will be looking at on the garmenting side.
Resham Jain
Understood. The second question, sir is based on your opening comments. CCI has bought significant amount of cotton this year and they are sitting with huge amount of cotton right now. So this working capital release which you saw this year is also in line with that. Given that the availability of cotton is not a problem, what are the thoughts? Because your cotton inventory has been little lower than last year.
Ravi Shanker Jalan
You are right on that. We have taken a very conscious call that what we see the cotton outlook as per our understanding is going to be stable. And because of that we don’t see at this point of the time the large inventory to be kept in our go down. Second, as you rightly said, CCI has a large chunk of inventory from where we can get a quality cotton also. So therefore quality as well as durability will not be an issue. Second, government is actively, and this is what my distinction, I don’t know whether that will get translated into the reality or not, but there are a lot of discussions is going on the removing the duty on the cotton.
So if that happens first, temporary of course it will not be permanent. Basically for a certain period they may remove the duty and that will also help in terms of maintaining the the cotton ability through the import also. So therefore our view, we don’t see any kind of big upside into the cotton crisis. Therefore we have created but still we have a reasonable inventory of 90 days. So it’s not that we have become hand to mouth because then we have to maintain the consistency, we have to maintain the quality and we are hedged at least for three months.
I hope I have been able to answer yours.
Resham Jain
Yeah, yeah. Yes, sorry I was unfun. Thanks for that. The last part of the question sir is with respect to the commissioning of new spinning unit. So as of today, company as a whole we have reached just about that 10% mark in terms of margins. But given this, there’s a new unit with lot of automation and all. Are you expecting any change in the margin profile versus the existing margins? Because this will be substantial, almost 20, 25% increase to your existing revenue.
Ravi Shanker Jalan
See, as you rightly said, this unit is getting commissioned in the month of June end. Since July onwards the production will start and definitely logically some kind of a add on to the overall bottom line or the margin should happen. But it all depends the outlook of the market in terms of the yarn prices to therefore yes, we are very positive that on the third quarter and probably maybe fourth quarter after the stabilization in the third quarter, things should improve even frankly speaking, we are also optimistic about the overall yarn market demand should improve which ultimately improve the margin as well. So we are optimistic on that number.
Resham Jain
Okay, thank you so much sir. All the best.
operator
Thank you. The next question is from the line of Ritesh Gandhi from Diamond Advisors Private Limited. Please go ahead. Hello, Mr. Ritesh, your line has been unmuted. Please go ahead with your question.
Unidentified Participant
Hi sir, just want to understand as compared to our historical spread across the industry, spreads have been extremely low. Now we’re hearing that because of the reduction in the cotton prices, the manufacturers have been able to keep some amount of the spread and spreads have started to move up. Is that what you guys are also seeing?
Ravi Shanker Jalan
Yeah, that is what I have said that we are also very hopeful. Maybe after this little bit of a clarity on the what you call tariff of the US things should start looking up.
Unidentified Participant
Got it. And so effectively are we already seeing increasing the spread in the first quarter or are the spreads still right now as they were in Q4?
Ravi Shanker Jalan
I think the spreads are likely to be similar in nature and because as I said it will take some time. Lot of inquiries, lot of activities are being seen. But conversion to the order this 90 days issue always getting kind of a settle down. Once it settle down, the things will improve.
Unidentified Participant
Okay sir. And with regards to the incremental capacity which is expected to come on in June of this year, how quickly would we expect the ramp up to happen?
Ravi Shanker Jalan
I think I will not take much of the time in terms of the ramping up. Probably the activity will start in July. I think by end of July beginning of us it should be full on.
Unidentified Participant
And we’ve got adequate demand also from our customers etc. To sort of fill up the capacity is not a problem.
Ravi Shanker Jalan
Yeah, I think there are two advantages we are going to get. One is the product which we are going to produce out of that will complement in our product basket because some of the products we have right now not offering. So this will help us to kind of complement our product market. Second, side by side we are also going for a knitting project. So these yarn in the medium terms will get consumed in our own new own knitting machines and that will help us to kind of deliver to the different customer profile which currently are not in part of our customers in the form of fabric.
Unidentified Participant
Got it, Got it. And just a last question. Historically you guys have implied that your normalized EBITDA would be in the high teens. So would we hope to sort of reach there by maybe the end of FY26? Maybe.
Ravi Shanker Jalan
This is very difficult to answer this or give a prediction because you have seen yourself the way the what you call volatility is being seen. But in normal circumstances, yes, because we have moved in a very lightful way. Look at our cost structure. Our power cost has been very beautifully has been managed.
Unidentified Participant
Yes, wonderful.
Ravi Shanker Jalan
Our labor cost is also 6%. Our cotton petroleum is a very efficient process. So overall I see that in terms of. And still our work on this cost structure continues to be remain focused in terms of the quality also in terms of the customers identification of the rightful customers. That also the process is continuing and that will continue further also I think that’s definitely normal. We will be definitely achieving that number.
Unidentified Participant
Understood, sir. All right. Thank you sir. That’s all for. Thanks.
Ravi Shanker Jalan
Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Raman KV from Sequent Investments. Please go ahead.
Raman KV
Hello sir, can you hear me?
Ravi Shanker Jalan
Yeah, Raman, I can hear you loud and clear.
Raman KV
Yes sir. Sir, I have only three questions. One, what is the current?
Ravi Shanker Jalan
If you don’t mind, can you take your phone instead of the speaker phone? Because.
Raman KV
Now can you hear me sir? Clearly?
Ravi Shanker Jalan
Yeah, yeah. better.
Raman KV
So I was asking what is the current cotton yarn spread?
Ravi Shanker Jalan
Okay, so the cotton yard spread at this point of the time is around rs119.
Raman KV
1119
Ravi Shanker Jalan
11 9.
Raman KV
Answer. So this is with respect to Q4, right?
Ravi Shanker Jalan
No, this. This is the current. You ask the current.
Raman KV
In Q4, how was the cotton gan spread? And you said that there has been some kind of uptrend in terms of the spread. Like the spread is improving. So can we expect the margins in Q1 to. To be much better than what we had in Q4?
Ravi Shanker Jalan
If you note down my statement, which I said, I said we are definitely seeing some kind of a positive. But I have also said that the margin spread is not at this point of time. We are not seeing in the current situation the margin spreads are not going up. Hopefully once the things get settled down after this 90 days of the uncertainty, things should be looking at 25, 26. Definitely. My expectation is things should be better. How much better? I think it’s very difficult to predict.
Raman KV
Okay. Answer. My second question is so you said you will be adding 14 knitting machines by the end of FY26. And you, I think I also heard you, you saying that 10 machines will be operational from Q3 FY26, right?
Ravi Shanker Jalan
Yes, this will be likely. This 10 machine will get started by September 25th. So you can say that full October, full third quarter and fourth quarter, we should be getting the advantage of this and depending upon the success of these 10 machines because we are currently also doing outsourcing model of the meeting. So therefore we don’t see any major issue in terms of of because 15 machines we are doing outsourcing, we have taken the machine on outsource and we are supplying the fabric to the customers. So that way we will be building this from 10 machines to 40 machines.
Raman KV
So how much incremental revenue can we expect from this forward integration into knitting fabrics?
Ravi Shanker Jalan
See, broadly, my understanding is exactly the number I don’t have at this point of time. But broadly in the 20% of the revenue of the yarn means because fabric has 80% or 85% of the cost of the of the yarn. So you can say incremental revenue on that increased amount will be around 15 to 20% on those yarn which is getting converted into the fabric and machines get established, then I think you will have a significant amount of increase in the volume in the revenue.
Raman KV
And so this will be like we can expect by the this 15% increase in terms of volume in FY27. Right. Which will be the like full year of operation coordinated fabric machine.
Ravi Shanker Jalan
This 15 will be in terms of the revenue, not volume in terms of the revenue because the revenue gets increased by 15%. 15 to 20% of the yarn which we consumed in the.
Raman KV
So yeah, that’s what I was asking. Will we see this growth in FY27?
Ravi Shanker Jalan
100%. You will see that.
Raman KV
And from the 10 machines, can we expect like an incremental revenue of 5, 10% in this year?
Ravi Shanker Jalan
Broadly I don’t have that number at this point of the time. But broadly I can tell you that the revenue this year in all put together will be approximately around 15 to 20% higher than. I’m talking about the revenue. 15 to 20% higher than that. 21 at 24, 25.
Raman KV
Okay, answer. The final one is like a more or less like a follow up question to what you said. So you have guided for 1520 revenue growth in FY26. So what is the volume growth guidance and margin guidance?
Ravi Shanker Jalan
See, first and foremost, let me slightly correct this number which I said 15 to 20% at this point of the time, the way we have projected this could be around 14 to 15%. I’m giving a very specific number which we have projected. This can be more also and this can be slightly less also depending upon how the yarn price is moved. The second, what you said, the second question, what were your questions? Sorry.
Raman KV
Volume guidance and margin guidance
Ravi Shanker Jalan
In volume. Definitely this 25,000 spindle volume guidance will happen and margins are very difficult to kind of predict the margin guidance for 2520, all this volatile situation. But I said generally I was feeling it, this would be better than 2425.
Raman KV
Okay. And in the opening remark you said your image to do 2x of FY25 turnover with 20% revenue from value added product. So this is for FY27.
Ravi Shanker Jalan
So I said in next three to four years of time we will have around 30% of our revenue coming from a expanded base or on the current base it will be doubled and on that 30% will be coming from value added of lifting and digging and processing processed fabric.
Raman KV
Thank you, sir.
Ravi Shanker Jalan
Thank you. Thank you.
operator
Thank you. The next question is from the line of Amit Ketan from Labrum Capital. Please go ahead.
Amit Khetan
Hi sir. Good evening. Thanks for the opportunity. So my first question was on, on if you could elaborate a little bit more on the tariff situation, especially from a yarn perspective. Now I can understand the bullishness on the garmenting and possibly on the fabric side from a long term. But if the tariffs lead to sort of a recessionary environment in the U.S. could that lead to demand headwinds? Especially given that yarn is a commodity which is anyways being exported and you know, it doesn’t really matter where it’s produced. So could that be a negative for us in terms of yarn prices and spreads?
Ravi Shanker Jalan
See 2, 3 views we have on that. First and foremost in terms of this tariff situation, our personal belief, and maybe we are right or wrong, we don’t know will get settled down. We believe that way, okay, somewhere this way or that way that will get settled down globally. But yes, that may lead to a little bit of a recessionary could happen. But though still we don’t believe, but it may happen and obviously if that happens automatically, that will have an impact on the final product. And ultimately the final product will also lead to the basic raw material which is yarn.
But the other part of this, if you look at see this will also make an impact on the marginal players which are not cost and strong on their operations and that means they will get hit hard and that will help us to kind of a company like us to have a better performance maybe on that because marginal players will have a major impact on that.
Amit Khetan
Okay, and second question was on, you know, you talked about the potential removal of import duties on cotton by the Indian government. What sort of incremental margins impact could be there just from this aspect, given what prices are today.
Ravi Shanker Jalan
I don’t think at this point of time we should look at any margin expansion because of this duty removal. This will only help in terms of creating a kind of a cotton fish because I said 100,000 bales or 1 crore bale fees with the CCI. So therefore a lot of opportunity of the price reduction in the cotton may not happen. But this will definitely cool down the overall prices and the availability of the cotton will be better. So I personally believe that no major expectation we should have from the margin expansion but this will definitely improve your cost in terms of your competitiveness with the global players and that will help you in terms of the overall demand improvements may happen.
Even if suppose that 10% duty remains. That will put a pressure on the prices of the garments or things like that. And some of the impact may get impacted because of this duty removal.
Amit Khetan
Got it, Got it. Thank you. And Marshall, congratulations on your elevation.
Marshal Rajendrakumar Sonavane
Thank you. Thank you. Amit.
operator
The next question is from the line of Resham Jain from DSP Asset Managers. Please go ahead.
Resham Jain
Yeah, hi, thanks for taking my question again. So on energy side sir, wind, as we know in the past in Tamil Nadu there were evacuation related issues and things were a little difficult. But how is the situation now on the ring side? Are you able to generate an evacuate full quantum of units?
Ravi Shanker Jalan
Yes. Luckily at this point of the time we don’t see any challenge in terms of evacuation or in terms of the power availability in Tamil Nadu. So that way it’s a very stable and good environment of.
Resham Jain
Sir, is it possible to share FY25 how many number of units you have generated through Bing?
Ravi Shanker Jalan
Yeah, right now I don’t have number but I can share with you offline.
Resham Jain
No problem. No problem.
Ravi Shanker Jalan
It seems that Overall I think 10 crore unit approximately. You have that data 10 crore minutes broadly. Honestly I don’t have the number to open that from five.
Resham Jain
No problem. Yeah. And sir, one more bookkeeping question on CapEx. What is the cash CapEx amount for FY26 you’re budgeting for?
Ravi Shanker Jalan
314 crore. We are projecting to be spent in FY25 26. Out of that major will be these two retail projects. The leftover volume amount and second regional knitting machine.
Resham Jain
Okay, understood sir. Thank you.
operator
Thank you. Ladies and gentlemen, you are requested to limit your questions to two per participant. And if you have a follow up question, you may please come back in the queue. The next question is from the line of Jatin from Swan Investments. Please go ahead.
Jatin Damania
Thank you for the opportunity again. So just wanted to understand now the Marshall getting elevated. So want to know his view in terms of the technical texture and man made fiber and if GSC is moving in that direction. Thank you.
Ravi Shanker Jalan
I think Martin.
Marshal Rajendrakumar Sonavane
Jatin. So see, I think it is now well established that technical textile has a lot of potential. Right? And India still, still is in a very nascent stage. The metric I see for that is sort of my kilograms per capita consumption for technical textile. If you compare India with us, China, we are sort of far, far, far below. From a GHCL perspective. I think the vision which has been stated is to move towards ready to cut fabrics. Right. Both on cotton and synthetic side. So yes, on synthetic side there will be some movement towards that end. But apart from that, any other technical textile at least it is not in the plan as of now.
Jatin Damania
Sure. Thank you.
Marshal Rajendrakumar Sonavane
Thank you.
operator
Thank you. The next question is from the line of Amay Cheddar from Banyan Capital. Please go ahead.
Amey Chheda
Thanks for the opportunity and apologies, it’s already been covered. But what led to this gross margin improvement? Y and Y and sequentially did the spreads improve?
Ravi Shanker Jalan
Sorry, can you repeat? Amit, again your question.
Amey Chheda
What led to this gross margin improvement? Did the cotton yarn start spreads improve?
Ravi Shanker Jalan
Yeah, the cotton yarn spread has improved primarily because of better product and better market.
Amey Chheda
Okay, and what was the Q3 and Q4? If you can give give a number.
Ravi Shanker Jalan
Q3 number in terms of the spread.
Amey Chheda
Yes. No spread which is 119 currently. What was in Q3 and Q4?
Ravi Shanker Jalan
I think it was approximately around 109 to 119.
Amey Chheda
That was in Q3, right? 109
Ravi Shanker Jalan
109 was a Q3.
Amey Chheda
And in Q4 it was around this one one nine.
Ravi Shanker Jalan
Yes, that number was like I said, same number.
Amey Chheda
Okay, thank you so much.
operator
Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investment. Please go ahead.
Lakshminarayanan
Yeah, a couple of questions. One is we understand that demand has actually come to a standstill globally based on the need from companies like Coats. It’s actually manufacturer threat in this situation. What gives us confidence for companies like us to sound positive and also put capacity expansion confidently.
Ravi Shanker Jalan
Yeah, very valid question. Let me tell you a couple of things which we believe because first and Foremost, like I said, the way we look at India as a competitive advantage, your other countries, we see that competitive advantage. Second is whatever the change which just now we have discussed about this global customer base shifting some of their priorities to India, that will also bring an advantage to Indian players. The third is see we are seeing a consolidation also the marginal players or the small players, they are getting kind of out of the business. So that will also bring the organized player or the stronger players will have an advantage.
So these are the three things probably I would say that is giving an advantage. But I have also said along with that in the near future we are looking at more investment towards the vertical integration. Like I said, knitting, weaving, processing, ready to cut fabric to be given to the delivered. And obviously the vertical integration will create a value for our shareholders.
Lakshminarayanan
Taking note of what you mentioned. So if there is capacity is available and people are going to dwindle, why wouldn’t you actually go and buy those capacities instead of actually setting up something on your own?
Ravi Shanker Jalan
Very important, very valid question you have said. Because this kind of a unit which we have on the block, they are very what you call old technology, what you call investments. Second is they are very small in size. So you have to various locations, you have to manage those small size of the spindleage or the capacity and therefore doesn’t make sense. The third, like I said already, we are not looking for any major investment the spinning side in any case, our investment is more on the knitting and weaving side which is a more of a vertical integration .
Lakshminarayanan
On knitting what is the kilograms per day you can actually get? And then if I look at the Vida and divide by the pendants you have, you are still appears to be on the lower side when I compare to few other companies. So just your thoughts on what is the output you expect on making per day and then how to improve the ebitda.
Ravi Shanker Jalan
Two things like I said, at this point of the time we are just putting around 10 machines. Once we have this 40 machines all in place, the new spindle is of 25000 spindle which we are putting in almost around 70% of the volume will go by 70% the volume of that unit will go into the in our all 40 machines of the knitting. So that way we will be able to. And this location of this both will be the same complex, the same building. So that will bring a lot of advantage in terms of the movement, in terms of the packaging and things like that.
We have a customer base also as I mentioned, because we are already doing an Outsourcing model. So that will also bring an advantage too in terms of overall our listing.
Lakshminarayanan
Can I just squeeze in one more question sir? What percentage of cotton is imported and does the current situation benefit importers in general?
Ravi Shanker Jalan
See basically we are not importing any cotton which is a commodity in terms of like your Indian cotton like low staple or the medium staple cotton we are not importing except except the Australian cotton. All the imported cottons we are only using for the value added like Australian cotton, your Pima cotton, Gija cotton, those kind of cotton and approximately and overall out of the total procurement of the cotton I think maybe approximately around 20, 25% of the cotton we are procuring which are all of the value added like your all Australian cotton .
Lakshminarayanan
These are imported quant you think?
Ravi Shanker Jalan
Yeah, imported cotton cotton.
Lakshminarayanan
And does the current situation is advantageous for importers? Because I think there is one remark you mentioned that there may be some import duty cut or something.
Ravi Shanker Jalan
See so far as these two cottons are concerned, your Pima and Giza which is a long staple cotton currently also there is no duty on that. But why I’ve said this advantage to this will be because once the duty removes overall cotton availability or the other people will import some of the cotton and therefore the Indian cotton prices upward will not happen. So that will give and at that time probably we may also look at the possibility of importing some of the cottons for the medium staple.
Lakshminarayanan
Thank you so much for detail answers and get back and keep signing.
operator
Hello Mr. Saket Kaboor, your line has been muted.
Unidentified Participant
Yeah hello. Yes sir. Am I audible Sir? And thank you for the opportunity sir. Firstly our closing balance for capital work in progress is 155 crore. So with the commissioning of this 25000 spindle what what should be the money, what should be capitalized and then 114 is the number which we have which will be spending for the next financial year.
Ravi Shanker Jalan
See like I said out of this 155 crores a total project cost of the retail project. So total investment into the retail project is around 215 crore. Okay, out of that as you said 115 crore gets 150 crores gets allocated from the WIP or the CPI capital work in progress balance amount will be spent here. The balance amount we are spending on the meeting project which I just mentioned majorly.
Unidentified Participant
And. And that part will get capitalized when sir, that 114 crore capex .
Ravi Shanker Jalan
Like 10 machines will get capitalized in by September end and after that whenever we spend Another distinct in three months time the moment we start stock spending the money in three months they will get capitalized because that lead period of that is very small they’re putting the knitting machine.
Unidentified Participant
And for this our project, our capex is aligned with the Tamil Nadu government state policy so there is any capital subsidy or any incentive what are the incentives we have provided for this project, sir?
Ravi Shanker Jalan
Yeah we have some some incentive under that government scheme and that will get accrued to us even for the money which we have already spent. The application has been filed for that and hopefully we will be getting those benefits. And approximately my memory is correct we will be getting around 15 to 20 crore rupees of the benefit out of.
Unidentified Participant
Out of the 500 crore which we have invested the total thousand crore capex will yield us 20 crore .
Ravi Shanker Jalan
Exactly. Saket I don’t remember that number but I think this number will be on 500 crores but exact number I have to just check broadly the numbers should be in the range of around 15 to 20 crores should come to us.
Unidentified Participant
Correct. And then for the MNA part you have, you have already alluded to so there are a lot of again that coming to the point there are a lot of stressed assets available I think in the southern part of the country and even GHCL textile was once architecture which is known to investors that was also a stressed asset buy. So taking into account are we also looking for any MMA activity that may or may not crystallize going ahead or we do not have the assets which are aligned to our portfolio that is what. And we will be expanding only on this organically on this.
Ravi Shanker Jalan
We are open, we are looking at all those possibilities. I would not say that we are not looking at the possibilities but we are very careful of which kind of assets like suppose we get some garmenting business totally we may look at so those kind of but spinning unless there is a well managed or large size we would not like to go for any investment decision spinning side lot of means possibilities we are seeing but we will be very careful of investment.
Unidentified Participant
Last point if I may be allowed on the borrowing part what should be our peak debt? Taking into account this thousand crore capex out of which I think the 500 already spent we have a long term borrowing of closer to 61 crore. So at the peak debt what are we anticipating? If any absolute number you can give or some some colors. Where is this time?
Ravi Shanker Jalan
One second. We’re just trying to fit the number Would like to give you a little precise number.
Unidentified Participant
Yes Sir.
Ravi Shanker Jalan
Approximately around 600 crores of the overall peak debt. Once we complete our entire process.
Unidentified Participant
Okay. And with that peak debt what should be the effect turnover ratio on the revenue looking like?
Ravi Shanker Jalan
My debt equity ratio will still be 0.35 or 0.35. And overall my top line will be roughly around 1700 crores. Approximately around. And you can. You can calculate the.
Unidentified Participant
My small point is currently we have a. We. We exited the year with the turnover of 1160 crore. And what you just spoke. We will be reaching the peak date of 600 crore. And the top line would reach to 1700. I did not get the math correctly.
Ravi Shanker Jalan
Yeah, 1700. Please understand one thing. Once you make an investment, capital investment, it takes some time. See at the end of the year like we capitalize in the year of 29. Okay. The benefit of that will be coming in the next year. Like if you look at this number, this number of 1700 crores will be up by around 200 crores next year. So cycle of this investment will always be get metallized in one or two years of time.
Unidentified Participant
And which year we will be hitting the near peak date, sir.
Ravi Shanker Jalan
29. And like I said this is very important to kind of highlight. Our debt equity ratio will remain 0.35 only. 0.35. Okay. Saketji, can you hear me?
operator
Hello. Mr. Heman, please go ahead with your question.
Unidentified Participant
Yeah, thank you for providing me the opportunity. I just wanted to ask you one thing like first of all our endeavor is to double our revenues in the next 34 years. Okay. So what are the drivers behind it? Because I see the capacity utilization is already at 99%. And 25,000 spindles which we will be adding in June 25th will fetch an incremental revenue of 250 crores only. Okay, so what. What will be the drivers and the revenue growth of 14 to 1515 which you are talking about in FY26, will it be skewed towards the second half of the next fiscal year?
Ravi Shanker Jalan
Yeah, this will be second half of the fiscal year. Because this investment will start kind of a. In June onwards means July onwards we will start getting the benefit of this investment. And the second you said what are the drivers. One is like I said the investment into the three areas. Your knitting and weaving and the processing part of it. So these are the three driving areas. And obviously we are also we have looked at in the later part of the year we are looking at some spindleage also which can happen happen primarily either the new unit and this we are Talking about after 23 years of this new spindleage.
Unidentified Participant
So sir, just to sum it up.
Ravi Shanker Jalan
Sorry.
Unidentified Participant
Hello.
Ravi Shanker Jalan
Now. Now we can see.
Unidentified Participant
I just wanted to submit up, sir. The knitting unit, the fabric unit and. The weaving unit plus the addition of 25,000 spindles will should actually double our revenues.
Ravi Shanker Jalan
No, no, no, no. I’ve said that in addition to that we will be also be. We have a plan to add on the spindleage also. But it is not in the near future. We are looking at. In 27. At 28. 29. Right.
Unidentified Participant
Okay. One more thing is like as you told us that. That the 1415 percent kind of revenue growth will be skewed towards H2 of the next fiscal year. So shall we anticipate a subdued kind of performance in H1?
Ravi Shanker Jalan
I think yes, you can. It will be very difficult to predict. But I would say that overall if the things doesn’t improve like the volatility at this point of time then you can. You can assume that way .
Unidentified Participant
Okay. But for we are intact. But we will still be intact on doubling our revenues in the next few years.
Ravi Shanker Jalan
Yes, for sure.
Unidentified Participant
In spite of the complete performance in H1. Right?
Ravi Shanker Jalan
Yes, sir.
Unidentified Participant
Okay. Okay. Thanks a lot.
operator
Thank you. The next question is from the line of Aditya from Robocapitan. Please go ahead.
Aditya Sen
Hi. Thank you for the opportunity. So in the PPT you have mentioned of 17 to 20% EBITDA margins. So can you please let us know what are the factors that should fall into place to achieve this level of EBITDA margin?
Ravi Shanker Jalan
See, I have already said Aditya that there are three things which are going to be important. One is the spread. Because ultimately this any margin improvement will only not happen only because of operational improvements. So that’s one. And we believe that at this point of the time the market is really subdued. And we believe that in a normal situation as I have explained to you also why we see optimistic to go up in the medium terms. So that’s one. The second is the spread or the vertical integration which we are talking about. These are the two factors which will definitely bring that kind of. And in the past we have achieved that kind of a number. We don’t see any region of the industry not coming to a normal situation going forward.
Aditya Sen
True. So from your understanding is there a possible timeline that you can share with us?
Ravi Shanker Jalan
I don’t think we can share the timeline in terms of the market volatility. This can happen maybe this year, this can happen next year. Year. But yet we can only what you call give a timeline of the vertical integration which we are doing or the volume increase which we are doing through the various capital investments into the business that we are definitely we have a timeline.
Aditya Sen
Okay. So that is roughly two, three years as you have mentioned previously in the call.
Ravi Shanker Jalan
Yes. You will see that knitting investment will be coming this year and that will get expanded next year. And year later you will see that project will be coming in and again year later. That will give. This is more of a gradual increase which will happen. It will not happen in one go after three years. It will not happen in one go in next year. No, it will be gradual increase.
Aditya Sen
All right sir. Understood. Thank you.
operator
Thank you. The next question is from the line of Raman KV from Sequin Investments. Please go ahead.
Raman KV
Hello sir, I just had a follow up question. So what is the capex for this year? I mean I just want. You said you already spent 500 crores. So that in the PPD it’s mentioned that you spend around 500 crores. So that is spent in this year. Or are you including the amounts spent previous year in FY25 itself?
Ravi Shanker Jalan
Yes, very valid question. First and foremost this 500 rule which we have given is the number which we have against the thousand crore of the sign off we have done with the Tamil Nadu government in that two years back we have gone for a 40,000 spindle of knitting. Sorry your synthetic spindle that is included. This also included the investment which we made in the green power. That is also included.
And the third investment which will get capitalized now will be the this 25,000. All this put together is 500 crores. This 500 crores is only which we have already spent. And I would say up to 23242425 still in WIP. Right. And that will get catalyzed net year which will be again that balance,500 crores. 200 will get capitalized next year.
Raman KV
So can we. So you’re basically saying 200 crores will be the payments, right?
Ravi Shanker Jalan
Sorry.
Raman KV
200 crores will be the tickets for this year.
Ravi Shanker Jalan
No, no. 114 crores will be the next year. The capitalization. Because there are certain capital work in progresses this year that will also get lied next year. Cash flow wise 114 crore will get spent next year.
Raman KV
And how much will be this debt ?
Ravi Shanker Jalan
We are not projecting too much of high debt. It will be approximately. We are projecting around a peak debt of this year will be 128crore. Against last year of 2425. Against the 63crores it will be 128crores. That means will say crore is the extra debt we are projecting.
Raman KV
So you are. You are basically saying the debt level will be 128 crore. And the capex you will spend this year will be in terms of cash flow will be 140 crores.
Ravi Shanker Jalan
Yeah. 114 crore. Yes.
operator
Thank you. The next question is from the line of Lakshmi Narayana from Tunga Investments. Please go ahead.
Lakshminarayanan
Yeah, Just want to understand when you’re putting this in place right what is the minimum single capacity you need to do? Get like is it like a block of 25,000 or how does it happen and what is the cost you actually have to incur on. On this. On this. Putting this 25,000 just for the singles alone.
Ravi Shanker Jalan
Yeah. So basically this there’s no means, I would say minimum number is required to be done. Because if you are an existing business you can, depending upon your cash flow you can go for a smaller size also or the higher size also. Like two years back we have gone for a 40,000 spindle and this we have gone with a 25,000 spindle. The second capital cost also depends on the kind of a product which you want to make it in this unit which is 25,000 spindle, 100% project, we are investing roughly around 215 crores for 25,000 spindle.
Lakshminarayanan
That is it depends on the kind of count of yarn you are trying to make.
Ravi Shanker Jalan
That all depends on that. If you’re going for a finer count, your cost per spindle will lower. If you’re going for a coarser count, your cost per spindle will be higher because of the higher preparatory investment.
Lakshminarayanan
And this entire output which you are making on yarn, how much is currently export exported out.
Ravi Shanker Jalan
O verall till now, whatever. We have export we are producing around 17 to 18% getting exported out of this new unit of 25,000 spindle. Our plan is to use for the further knitting projects. Once we put this 40 machines, 70% will get consumed into our own knitting fabric.
Lakshminarayanan
And what kind of cotton.
Ravi Shanker Jalan
Sorry, your voice is gone.
operator
Yes sir. The current participant has been disconnected. As there are no further questions from the participants I now hand the conference over to the management for closing comments.
Ravi Shanker Jalan
Thank you everyone. Thank you. As I have been mentioning every time that your input definitely brings a lot of thought into our mind. And as we have been doing our role of improving our performance on the various operational side will continue. And we are very clear our role is to create a value for our stakeholder. But we will be very cautious on our investment approach. And we will be making a judicious investment and utilize the assets fully to make sure that we earn the money out of the investment which we made. Thank you very much for your support.
operator
Thank you. On behalf of Goindia advisors, that concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.