Sanathan Textiles Ltd (NSE: SANATHAN) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Jude D’souza — Sanathan Textiles Pvt
Beena Paresh Dattani — Chairman & Managing Director
Sammir Dattani — Executive Director
Sanjay Shah — Chief Financial Officer
Analysts:
Harsh Mittal — Analyst
Kunal Ochiramani — Analyst
Darshil Pandya — Analyst
Akash — Analyst
Surabhi — Analyst
Presentation:
Operator
Good day and welcome to Sanatan Textile Limited Q1FY26 Earnings Update Conference call. 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 star then zero on your touchdown phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jude D’ Souza from Sanatan Textile. Thank you. And over to you, Mr. Jude.
Jude D’souza — Sanathan Textiles Pvt
Thank you. It is my privilege to welcome you to the earnings call of Sanatan Textiles Ltd. For the first quarter ended June 2025. I am Jude D’, Souza, the company secretary and the compliance officer entrusted with overseeing investor relations. Before we proceed, I would like to bring to your attention that certain statements made during this discussion may constitute forward looking statements. These statements are based on our current expectations, assumptions and beliefs regarding future developments and are inherently subject to various risks, uncertainties and factors beyond our control.
Such forward looking statements involve both known and unknown risk and we advise you to interpret them with caution. Now, it is my honor to introduce the esteemed members of our management team who are present with us today. Mr. Paresh Duttani, the Chairman and Managing Director Mr. Sameer Duttani, the Executive Director Mr. Sanjeev Shah, the Chief Financial Officer Kindly note that this conference is being recorded and the recording will be made available on our website accompanied by a full transcript for future reference. Some of the information regarding the company’s business may already be familiar to certain participants, however, it is being shared for the benefit of those attending for the first time. Without further ado, I now invite Mr. Paresh Dattani, our Chairman and Managing Director, to share his insights and address the esteemed participants.
Beena Paresh Dattani — Chairman & Managing Director
Good evening everyone and thank you for joining us on our Q1 FY26 earnings call. Before delving into the operational and financial performance, let me begin by giving you a brief overview of the company. Sanatana Textiles is one of India’s most diversified and fully integrated yarn manufacturer, powering the textile and technical textile ecosystem in India and around the world. Yarns are the starting point of the textile value chain and we have a presence across the polyester film and yarn, cotton yarn and yarns for technical textile segment. We started our journey in 2005 with an initial capacity of 4,500 metric tons per annum.
Our manufacturing facility at Silvassa now stands at a capacity of 2,23,000 metric tons per annum, comprising 2 lakh tonnes of polyester yarn, 14,000 tons of cotton yarn and 9,000 tons of technical textile yarns grown at a CAGR of 22% and we hope to continue the same in the coming years with the Pan India presence. We cater to over 7,000 customers and 27 international markets via 900 plus distributors. We experienced an impressive 92% customer retention rate, a testament to our strong relationships and consistent product quality. We have also created backward integration in the polyester division allowing us to operate at scale and deliver value added offerings. This integration approach and our balanced growth across the three verticals have enabled us to build a diverse product portfolio supplying to customers across various end use applications, thus thus helping us to stay resilient through seasonal cycles while continuing to add value to customers and stakeholders.
Ayans find application in a wide spectrum of industries including apparel, sportswear, home textiles, automotive, industrial fabrics, logistics and geotextiles. This industry wide relevance gives us the ability to serve both traditional and emerging sectors effectively. At the heart of operations lies a deep commitment to innovation, customer centricity and operational efficiency. Our in house R and D team continuously develops value added yarn aligning our portfolio with evolving consumer preferences for functionality and sustainability. In line with our growth strategy we have set up a greenfield facility in Punjab with a capacity of 3 46,000 metric tons per annum which will take our total polyester Yarn capacity to 5 47,000 tonnes per annum in a phased manner.
I am delighted to share that this project is progressing well. The triumph production has begun and we are on track to commence commercial operations on 27 August 2025 strengthening our ability to serve North India textile market with reduced lead time and cost effect efficiencies beyond scale, the Punjab facility represents a leap towards sustainable manufacturing. Built on an 80 acre freehold parcel of land, your unit is being developed with green manufacturing practices including zero liquid discharge use of solid fuel from agri waste and automated warehousing and transport systems to drive resource efficiency, thus creating a local ecosystem in North India.
This marks a significant step forward not only for Sanatan but also for the broader goal of strengthening India’s domestic textile value chain and expanding for competitiveness. I will now hand it over to Savit for the operational highlights. Thank you.
Sammir Dattani — Executive Director
Thank you Chairman and good evening to everyone. The first quarter was a steady operational quarter for us. At our Silvasa facility we continued to operate at high capacity utilization optimizing coput to meet growing demand. Coming to the production and sales numbers in Q1 FY26 we achieved a production of 57,000 tonnes maintaining a strong output and operational efficiency during this period. During the quarter we sold 59,000 metric tons of yarn reflecting a healthy demand and strong customer interest. From a macro standpoint, demand conditions remain robust. The Indian textile industry is at an inflection point driven by shift in consumer preferences and global supply chain.
One of the notable transitions is the accelerated shift towards man made fibers, especially polyester. Globally, man made fiber consumption rose from 112 million tons in 2005 to 136 million tonnes in 2024 with polyester leading this surge in demand. In India, the MMF segment contributes to 50% of the domestic fiber mix but is expected to grow significantly in the coming years as affordable fashion, active wear and technical textiles grain ground. Some of the key reasons for the shift towards polyester yarns are the functionality that it provides to the user, the adaptability across different sectors and applications and of course the super durability of the product which increases the life cycle of the product. Government policies like the PLI Scheme for man made Fibers and the National Technical Textile Mission are expected to further boost this segment.
As part of our long term strategy, our upcoming greenfield facility in Punjab has been designed to capitalize on these emerging industry trends and demands. With a modern high capacity infrastructure and latest equipment. It will enable us to benefit from economies of scale and lower per unit cost of production. Overall, this facility will serve as a fully integrated, environmentally sustainable green textile manufacturing facility, setting a new standard in scale automation and ecological stewardship within the Indian textile sector while fostering a robust local ecosystem for the textile value chain in North India. I’ll now hand it over to Mr. Sanjay Shah, our CFO who will provide a detailed financial overview. Thank you.
Operator
Ended June 30, 2025, sales volume stood at 0.59 lakhs metric tonnes. Revenue from operations stood at Rupees 745 crores compared to Rupees 732 crores in Q4 FY25. This increase was led by a slight increase in sales volume highlighting healthy underlying demand and consistently high levels of plant utilization. However, on a year on year basis we witnessed a 4.5% decline in revenue led by softening of raw material prices and decline in average sales prices. EBITDA for the quarter is rupees 70 crores with margins at 9.3% at stood at rupees 40 crores with margins at 5.4%. Thank you. Shall we open the line for questions? Speakers?
Questions and Answers:
Operator
Yeah. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question comes from the line of Harsh Mittal with MK Global Financial Services. Please go ahead.
Harsh Mittal
Good evening. Am I audible?
Operator
Hello.
Harsh Mittal
Yes. Good evening sir. Yes. So thank you for the opportunity. And firstly congratulations for a good set of numbers amidst a tough environment. So my question is more towards the macro level is that what is your assessment of the impact of the tariff imposed on India on particularly the man made fibers. And the sub part of this question is that how has your conversation evolved with your customers over the past one week? Or let’s say one month. Yes. So these are the questions.
Beena Paresh Dattani
On the first part of your question, Harish. As far as the tariffs are concerned, firstly it’s early days. Secondly, as far as the exports to the United States is concerned it’s more skewed towards the cotton compared to the polyester. And as far as concerned our direct. Direct really would not impact us very much over there. As far as the indirect exports concerned, yes, our customers are there. But when we look at indirect exports we are always say that we are at 25% indirect exports. But out of that the majority exports will be to non US countries as far as the polyester is concerned.
Harsh Mittal
Okay, okay. Thank you.
Operator
Thank you. Next question comes on the line of Kunal Ocheramani with Alpha alternatives. Please go ahead.
Kunal Ochiramani
Sir. Just wanted to understand the domestic and global outlook. How is the demand and supply scenario for polyester yarn? Secondly, I could not understand why are the revenue per spindles for polyester yarn two and a half times than cotton? Yes, just wanted to understand this two part.
Sammir Dattani
Hi. So firstly, regarding the growing demand. The demand for polyester globally is growing consistently and is predicted to grow at about 3 to 5%. Whereas the growth of polyester and MMF in India is far more robust indicated at between 5 to 7% in the coming two, three years. Of course the growing consumption of the youngest and the largest population in our country is one of the key reasons the E commerce platforms, the fashion conscious young youth population and most importantly the shift in India towards man made fibers and polyester especially. Currently India consumes about 50% cotton yarns and 50% polyester yarns in the total basket. Whereas the global mix is 70% polyester and 30% cotton. And as consumption grows in India, we see India also moving towards that shift. As far as the revenue is Concerned, our revenue 77% comes from the polyester filament yarn. In polyester the asset turn is close to 1.7, 1.8. Whereas in cotton which contributes to about 17, 18% of our revenue, the asset turn is 0.8. I hope that answers your query.
Kunal Ochiramani
Yes. And how about the realizations how premium does the polyester coats to cotton yarn?
Sammir Dattani
So obviously the selling price of cotton yarn is much higher than polyester because the raw cotton prices are much higher than the raw material price of polyester. But because of the difference in asset turn at an ROCE level they are quite similar. And over the years polyester and over the years polyester has a great demand growth that we are anticipating which is the main reason for the growth of polyester in India.
Kunal Ochiramani
Thank you.
Operator
A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Tashir Pandya with Fin and Trust Capital. Please go ahead.
Darshil Pandya
Hello. Am I audible, sir?
Operator
Yes, you are audible.
Darshil Pandya
Hi, sir. Thank you. Sir, first question would be on the. On the new facilities that were supposed to, you know, supposed to be live by the end of the quarter which has been almost now delayed for two months. Wanted your view that you know what has led to this delay. And subsequently since we are two months needed, are we keeping the guidance impact of what we have been targeting given what circumstances today we are in with regards to the tariffs? Yes. Due to the early onset of the monsoon which normally in Punjab we start getting rain from. From the end of June to the beginning of July. But this year we got it about a month earlier. So due to the early onset of the monsoon we lost a few weeks. Yes, but having said that, as I mentioned and we are ready to commence commercial production on the 27th of August. Correct. So are we confident of maintaining the guidance that we are given for this financial year?
Beena Paresh Dattani
Hello, speakers please. Go ahead. Yeah. Hello, can you hear me? Yeah. Yes, sir. Yes. Yes. As far as the annual top line is concerned, we still maintain we will be around the 4,500 crore mark. And a double digit EBITDA is what we aim to do. Okay, got it. And sir, with regards to cotton yarn and technical textiles capacities. Sir, wanted your thoughts as to are we planning any capacities in the. In this segments and what timeline are we suggesting? Yes, technical textiles. As we mentioned earlier, we are at 9,000 metric tons per annum. Today we are doubling that capacity and we expect that we should get the full year of FY27 for that. FY27 as far as the cotton. That’s right. FY27. The full year we should get that 9,000 additional tons. So how much are we investing in this capacity? It’s already a part of the current project.
Darshil Pandya
That is okay. Okay. And with regards to cotton yarn.
Beena Paresh Dattani
And regards to cotton yarn, we are adding another 72,000 spindles and we aim to get the entire FY28 for that.
Darshil Pandya
Okay, got it, sir. I’ll fall back in the queue. Thank you so much for taking my questions. Thank you.
Operator
A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of Aakash and individual master. Please go ahead.
Akash
Hello. Yeah, hi. I’m audible. Yes, you are. So congratulations on good set of numbers. I have a couple of questions. First of all, on y basis our volume has been, you know, stable. But I guess our revenue has fallen because of falling raw material prices. So do you have any guidance like what could be a stabilized sales price going forward? Going forward, we.
Beena Paresh Dattani
We expect the sales price to remain in the range of about 114rup fees which is what we expect this year to be. So we should have a top line similar to close to 3000 crores from this investment facility.
Akash
Okay, sir. And can you elaborate or expand on your ESG profile at Punjab? Come again please. Can you explain about your ESG profile at Punjab? Yeah. So it’s a 100% zero liquid discharge facility that we are setting up. We have boilers for our heating which is from agri waste. We are not going to use any liquid fuel for that. So we are going to be a story on agri waste over there. And we have a lot of automation and things like that. So that’s. That’s the portion that we look at. And also as far as the ES is concerned, our packaging is a lot based on the reusable part of it. That will reduce the carbon footprint on that. Okay. So following up on this, our power cost is one of the, you know, important thing. So at commissioning of Punjab facility, what would be the benefit on the power cost?
Beena Paresh Dattani
Yeah, so Punjab as well. Our agreement with the government of Punjab for the first four years of operation. Speakers. Go ahead. Yeah. Can you hear me? Yeah. Yes, sir. Yeah. Compared to Our existing unit at Silvasa, which is closer to six rupees. Okay. Okay. So on the financial front I saw that our gross margins improved but our EBITDA margins were flattish or you know, declined a little bit. So can you explain on the, on that. I think Sanjay will take these questions.
Operator
Yeah, yeah. So you’re.
Akash
On year basis there was an increase in power and fuel cost as well as the wages got revised due to which our EBITDA has slightly gone down as compared to the last year. However, on a quarter, on quarter basis we are. EBITDA has improved from 68 crores to 70 crores.
Beena Paresh Dattani
Okay. Okay. And so can you explain on the gross margins. Gross margins have increased. So what was the reason behind the thing? The gross margins have moved up because as we mentioned earlier, the demand has been very robust. And that’s why if you see both the previous quarter as well as this quarter we have been very stable on the EBITDA numbers. The last quarter we had 68 crores. This quarter we had 70 crores. And with the way it’s going, we are going to be moving up from here. And as I mentioned for the year we are looking at a double digit dividend.
Akash
Okay. Okay. Thank you sir. That’s it for my time. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of survey and indujilmesa. Please go over there . Hi sir, just wanted to know that during this financial year to achieve 4,500 crores of top line, at what capacity are we going to use our expansion. Expanded capacity.
Beena Paresh Dattani
So as I said, we are commencing commercial production on the 27th. And in the next two, two and a half months we will be ramping up to our first phase capacity of 700 tons per day. So that effectively will give us about 13 to 13 and a half crore kilograms for the year. At a price of about 110 to 15 rupees, we should get close to 1500 crores.
Jude D’souza
Right. And for the full year what EBITDA margins can we expect? Because the as you mentioned, the Punjab facility has some advantages, right? Yes, you are absolutely right. Thus we are saying that we are confident of achieving double digit EBITDAS for the year at a company level double digit growth. You mean double digit EBITDA numbers. So okay, so more than 10%? Yeah, yeah. Upwards of 10% margin is what you’re saying. That’s right, that’s right, that’s right. How, how much higher than that? If you can let us know, we are, we are aiming to be between 10 to 11%. Okay, understood. Thank you sir. Thank you. A reminder to all the participants that you may press star and one to ask a question. Once again, a reminder to all the participants that you may press star and one to ask a question. Ladies and gentlemen, we have a question that is from the line of Watsal Daria with Aruniko Alpha Advantage Funds. Please go ahead. Can you hear me? Thank you. Thank you for the opportunity and congratulations on good set of numbers.
Beena Paresh Dattani
So my question was related to your share of export for the current quarter and your guidance or expectation for the upcoming year. As I mentioned earlier, our exports have always varied between 5 to 6 to 16% numbers depending on. The main consideration we look at when we decide on the export numbers is the net back that we get as we are not compelled to place material in the export market. We look at export volumes depending on where we get better netbacks. So that will always vary. So we are not hard pressed because whatever we produce today we have more demand than what we produce. So we are not hard pressed to put it in the export or the local market. So we do that as well based on better net back wherever we get. And as far as going forward for the year we are looking at about 6 to 7% on the export. Got it? Got it. And so my second question was related to the interest cost for the coming year as our new facility get operational and we have certain amount of debt on our books. So what is the expected interest cost for the upcoming quarter or FY26 as a whole? As a whole we should be close to 80 crore on a consolidated level.
Operator
Thank you. A reminder to all the participants that you may press star in one to ask a question. Next question comes from the line of Duanil with I will fund. Please go ahead. Hi. Hi. Parish Bhai and the team thank you for the opportunity.
Surabhi
Hi Donald. Am I audible Sir? Hi sir. Just only to understand now the overall US export seems to be. I mean we spoke to government players also. So next three, four months as of where we stand it looks that we would hardly be doing any exports to them. Right. So in this case if the overall government demand is little bit slowed. Right. So how are you seeing in context with the newer capacity and even demand going ahead? So should it be little slow and then start to pick up or you’re confident it should. Hello? Yeah yeah sorry we lost you. Yeah, yeah yeah. Go ahead please. Okay sir, I completed my question. Should I repeat. Just repeat the latter part because we lost you towards the end.
Beena Paresh Dattani
Yeah. So. So sir, on, in. In the current context with the demand being little slow in terms of the overall garment exports. So. So with our newer capacity coming in how are we placed as of now and how do you see the overall demand shifting? Dunil, as I mentioned earlier as far as the exports of garments is concerned to the United States it’s more skewed towards the cotton part of it. That’s one part of it. As far as we are concerned as far as the new facilities, the new facility is concerned we are going to be more or less on the local because that’s the market that, that’s the low hanging fruit that we always wanted to tap on considering the advantage of being the local supplier there and the just in time and the cheapest supplier for the buyers there. So we don’t see a challenge as far as our new facility is concerned because of these tariffs. Having said that at industry level yes the cottonian may see some pressure because of this for a shorter period. But on the filament yarn side I don’t see any pressure because of these tariffs.
Surabhi
So the incremental demand when we move to the newer plant. Would be mainly from replacing say the imports or from the west market which used to come there. I think as you had mentioned, it’s a 1 million ton market. So we are looking to tighten.
Beena Paresh Dattani
Yeah, yeah. No, we are already supplying to the west, to the north from our current facility also. But having said that, the entire material there will be placed. Because what we are setting up there, Dhonil is just about 20% of what is already consumed there. And that market is also growing in about 4 to 5% annually. But we have not factored that in. Just out of what is consumed there today we are set up only 20%. So our material is placed as far as the material from our Silvassa plant which is going up north. We have both the options. If the netbacks are better, we can also supply that volume from the Silvassa plant. If not, we can place it in the western, southern or even the export market depending on where we get a better netback. And the western market downstream today is very robust. It’s growing at almost 8, 9% downstream capacity. So we have no challenge in placing that material in the west and south. And the export if need be.
Surabhi
Got it sir. And sir, I missed the volume numbers. Polyester, yam and cotton. What was the sales volume this quarter? What was the volume for polyester and cotton for this quarter? The volumes you’re saying?
Beena Paresh Dattani
Yes, 1559000 tons.
Surabhi
Okay. And off that the. The. The. I don’t have the ready split on hand as on today. And sorry sir, this last question. Overall other expense had increase sharply this quarter. When I compare on y. On Y terms and quarter on quarter also. So, so was it because of the new plant?
Beena Paresh Dattani
We had to take some higher cost. Higher cost of. Of other. Other expenses. So last year we were at 121 other expenses as Sanjay Bhai can explain to you is because of the fuel length, power and fuel costs. You can explain that?
Sanjay Shah
Yes. As compared to the earlier years the power and fuel cost was slightly higher. And the wages of the contractual workers got revised. Therefore, the other expenses were on the higher side as compared to the last year. However, on sequence.Movement in ebitda. However, the current EBITDA levels are better than last year’s EBITA average EBITDA level. And considering the EBITDA levels prevailing at the end of the quarter, June quarter, we are quite confident of achieving the targeted double digit EBITDA percent for the year.
Surabhi
Got. Got it. Thank you. And all the rest. Yeah.
Operator
Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Once again, a reminder to all the participants that we may press star and one to ask a question. Ladies and gentlemen, we have reached the end of question and answer session. I would now like to hand the conference over to Mr. Paresh for closing comments. Thank you.
Beena Paresh Dattani
I thank the entire team at Sanathan Textiles for their untiring efforts and all our stakeholders for their continued support and faith in the company. This is all from our side. I would like to thank you all very much for your time and energy. Thank you very much.
Operator
Thank you. On behalf of Sanatan Textile Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.