Sanathan Textiles Ltd (NSE: SANATHAN) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Unidentified Speaker
Jude Patrick Dsouza — Company Secretary and Compliance Officer
Paresh Vrajlal Dattani — Chairman and Managing Director
Sammir D Dattani — Executive Director
Sanjay Anirudh Shah — Chief Financial Officer
Analysts:
Unidentified Participant
Rushil Selarka — Analyst
Sunil Jain — Analyst
Aashish Upganlawar — Analyst
Dhawal Doshi — Analyst
Marshal — Analyst
Varun Gajaria — Analyst
Ashutosh Nemani — Analyst
Pranav — Analyst
Harsh Mittal — Analyst
Harshit Sachdeva — Analyst
Presentation:
operator
Ladies and gentlemen. Good day and welcome to the Q4 and FY25 conference call of Sanatan Textiles Limited. 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 touch tone phone. Please note that this conference call is being recorded. I now hand the conference over to Mr. Jude D’ Souza from Sanatan Textiles. Thank you. And over to you.
Paresh Vrajlal Dattani — Chairman and Managing Director
Context size limited.
operator
I’m sorry, you were not audible. Can you please start from the beginning? Thank you.
Jude Patrick Dsouza — Company Secretary and Compliance Officer
Good evening ladies and gentlemen. It is my privilege to welcome you to this earnings call of Sanatan Textiles Limited for the fourth quarter and full year ended March 2025. I am Jude D’ Souza, the company Secretary and 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 risks.
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 the Managing Director. Mr. Sameer Dutkani, the Executive Director and Mr. Sanjay 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. Without further ado, I now invite Mr. Parish Duttani, our Chairman and Managing Director to share his insights and address the esteemed participants.
Thank you.
Paresh Vrajlal Dattani — Chairman and Managing Director
Good evening everybody and thank you for joining us on our Q4 FY25 earnings call. It’s a pleasure to share with you the journey of Sanatan Textiles Ltd. And our vision for the future. The year gone by has been transformative for us. We successfully capitalized on the growing demand strengthened customer relationships for Ayans which is the starting point of the Textile value chain. Our strategic focus on innovation, customer centricity and operational efficiency has yielded strong results across key performances metrics, positioning us well for the future growth. A major highlight of FY25 was the successful completion of our IPO, a milestone in the journey of the company Coming to the Industry Development India’s textile industry is one of the largest in the world.
It contributes about 2.3% to the country’s GDP, 13% to the industrial production and 12% to the exports of the country. India is the second largest producer of textiles and garments globally and ranks third in exports. The sector is projected to grow at a 10% CAGR, reaching USD 350 billion by 2030. Demand conditions in India remained robust with a strong revival in the textile consumption and continued government push for make. In India. We are also seeing a shift from conventional cotton to value added man made fibers, a transition that aligns well with our strength in the polyester filament yarn space.
Furthermore, global supply chain realignments, particularly the China plus one strategy, are creating new opportunities for India. Many international apparel brands are diversifying their sourcing and India is emerging as a key beneficiary of this shift. On the policy front, the government’s initiatives such as the PLI Scheme for Man Made and Technical Textiles and the National Mission to Boost Cotton Productivity continue to fuel growth for our sector. These broader industry trends create a highly favorable environment for companies like Sanatan Textiles where we see strong demand for high quality yarns across apparel, home textiles and technical applications. Another significant development on the international trade front is the UK India Free Trade Agreement.
As many of you are aware, India and UK have agreed in principle to a historical FTA that is expected to come into force soon. This agreement is expected to reduce tariffs on yarns, textiles and apparels from India to the UK at Sanatan. I’m happy to share that we have made significant progress on our new greenfield facility in Punjab. This state of the art facility, scheduled to be operational by the first quarter of FY26 and will effectively double our production capacity of polyester filament neons when fully operational. Our expansion in Punjab is a strategic move to bridge the supply gap in North India, ensuring faster deliveries and cost efficiencies for our customers.
This marks a significant step towards strengthening India’s domestic textile ecosystem. With our greenfield project in Punjab, we are not only scaling up capacity, but also integrating sustainable manufacturing practices to minimize environmental impact while maximizing efficiency. This year, Sanathan Textile promises to ensure that we remain committed to increased capacity, capture new opportunities, build deeper relationships with our stakeholders, and I’m confident that our company is well prepared to scale new heights and deliver transformative growth. Now I will hand it over to Sameer for the operational highlights. Thank you.
Sammir D Dattani — Executive Director
Thank You Paresh bhai. Good afternoon everyone. FY25 was a good stabilizing year for the company. On the operational front, we optimized production at our Silvasa facility and continue to run at high capacity utilization to meet the growing demand. We operate in three yarn verticals at the facility in Silvassa. Having a total production capacity of 2,23,000 tonnes per annum across polyester filament yarn division, cotton yarn division and yarn for technical textiles. In Q4FY25, our total sales volume for the quarter reached 59,850 metric tons approximately and we saw an increase in EBITDA margins because of strong demand.
To meet this rising demand, we are expanding across our yarn business verticals. With the Punjab facility at its final commissioning stage, Phase one is on track and set to start by the end of this quarter. By leveraging our scale, extensive distribution network and strong customer base, we aim to cater to a broader customer base and optimize costs, thus enhance profitability for us and our customers through an integrated value chain. On our product front, we had an exciting value addition initiative this year with the launch of a new product called S Flex. S Flex is a groundbreaking self stretch polyester filament yarn.
This yarn offers a four way stretch capability without any need for spandex blending, making Hflex a cost effective solution, a sustainable alternative to traditional stretch yarns and also improving recyclability of the fabrics made from S Flex yarns. We are clearly seeing that the market today is gravitating towards functional, sustainable and smart textiles and at Sanathan we are constantly aligned to these demand trends. Another such example is our moisture management yarn series called Sanatan Dry Cool. This specialized polyester yarn is engineered to wick moisture and dry quickly, making it a perfect solution for activewear and sportswear and apparels.
We’re also seeing a growth in our technical textile yarn demand, particularly in the area of coated fabrics and industrial application. While this segment is still relatively small of our overall sales, it represents one of the fastest growing areas for us. We also cater to geotextile sector and supply yarns for Geo fabrics used in infrastructure projects. The company’s technical textile yarn division is utilized in related industrial products such as conveyor belts, safety sling, deep sea fishing nets, marine ropes and also automobile fabrics. The trend is clear, domestic customer base and technical textile is growing rapidly and they are looking for domestic suppliers who can deliver consistent quality and high performance yarns.
Keeping in sync with this growing demand, we are looking at doubling our capacity for yarns for technical textiles from the current 9,000 tonnes per annum to 18,000 tons per annum in the near future. Another area of high growth is affordable fast fashion. There is a pronounced shift in the market towards affordable fashion. Essentially value for money apparels that are trendy yet budget friendly. This is true in India with the growth of organized value retail chains that are multiplying in the country. Affordable fashion requires materials that are cost effective. They also need differentiation and quality to satisfy the customer demand.
This is where our innovative yarn offering gives us an edge. By providing yarns that are built with functionality, with cost advantages, we work with our downstream partners and try and reduce production costs and create better products for the end consumer. I will now hand over to Mr. Sanjay Shah, our CFO who will provide detailed financial overview. Thank you.
Sanjay Anirudh Shah — Chief Financial Officer
Thank you, Sameer. For the quarter ended March 31, 2025 Revenue from operations stood at rupees 732.18 crores. EBITDA for the quarter is rupees 67.61 crores with margins at 9.23%. PAT stood at rupees 43.65 crores with margins at 5.96%. For the full year ended March 31, 2025 Revenue from Operations stood at rupees 2998.61 crore as against rupees 2957.50 crores in FY24 an increase of 1.39%. EBITDA for FY25 stood at rupees 262.78 crore as against rupees 226.58 crore in FY24 an increase of 15.98% year on year on account of gross margins. This had led to improvement in EBITDA margins by 110 basis points.
FY25 pad stood at Rs. 160.45 crores against PAT of rupees 133.85 crores in FY24. An increase of 19.87% year on year and improvement of PAT margin by 82 basis points. Thank you everyone.
operator
Should we begin with the question and answer session?
Sanjay Anirudh Shah — Chief Financial Officer
Yes.
Questions and Answers:
operator
Thank you. Ladies and gentlemen. 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 remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. We will wait for a moment while the question queue assembles. We will take our first question from the line of Rushil 7 from Pink. Well, please go ahead.
Rushil Selarka
Hello.
operator
Yes, please go ahead with your question.
Rushil Selarka
Yeah, yeah, yeah. Sir, my question is that in the export market like are we uncomp. Like the industry. The Indian textile industry is uncompetitive because the China has a raw material advantage. And because of that you know we are not being able to get a high lead margin compared to the Chinese player.
Paresh Vrajlal Dattani
You are right to a certain extent. Yes. Our raw materials are a little more expensive than the Chinese ones. But having said that for re export we can always import non BIS cargo from China also. Then the only differential is the freight component which is not very high. And this too could. Going forward with the new two commissioning of the two new plants in the next year in the country. I think we should be even in a more competitive position.
Rushil Selarka
So this IOCL and Gale are you know expanding their PTA plan, right?
Paresh Vrajlal Dattani
Yeah.
Rushil Selarka
So that will give us an advantage, sir, in terms of procurement of raw material.
Paresh Vrajlal Dattani
Yes, yes. Because as a country we today import about almost 1.8 to 2 million tons of PTA per year. And with these two plants there will be a capacity addition of almost 2.4 to 2.5 million tons per annum. So we will be as a country excess in PTA and that would give us the edge that you are talking about.
Rushil Selarka
So sir, will be there any cost savings from the next year itself? Like how much we import PTA and how much we procure domestically domestic. So there will be any mix like where we’ll be procuring more on domestic side and less on import side.
Paresh Vrajlal Dattani
Yes. At Sanatan today, as we stand today for the Selvasa plant we import about 50% of our raw material going forward. Yes. Once these plants does the imports will definitely be come down to a minimal level. At the Punjab facility of course we have a tie up. And we intend to buy most of our raw material coming from the Panipat refinery of Indian oil.
Rushil Selarka
Okay. And so this how does crude oil affects our realization? And like do we do any contract like to mitigate this risk or like is the quant there are short term contracts. And this crude oil prices do affect us in terms of realization.
Paresh Vrajlal Dattani
Crude oil prices do not directly impact us in any way. But having said that, yes, when the crude oil fluctuates a lot it does have an impact on the PTA and the paraxylene prices. So somewhere down the line it affects us. But having said that because of our pricing, as I’ve always said locally we do a weekly pricing. The PTA suppliers and internationally once a month averagely 15 days. So we are not carrying that much of risk of raw material volatility at all.
Rushil Selarka
And so when we sell to clients, so that time also we do a contract or we sell it on day to day price basis.
Paresh Vrajlal Dattani
No, we as I said because our local PTA raw material contracts are changing every week which gives us a seven day volatility internationally about a month averagely 15 days. So when we sell material. Yes. We fix the pricing for post to about 15 days only.
Rushil Selarka
Okay. Okay. Got it, sir. And sir, what will be the new power cost and like in terms of unit in Punjab plant?
Paresh Vrajlal Dattani
Punjab plant. We have an agreement with the government where they give us power at 5 rupees a unit for the next four years. For the first four years.
Rushil Selarka
Okay. Is that like going forward, is there any requirement for us to invest in renewable so that you know, a power cost per unit comes down over the time which will give us more in terms of efficiency and in terms of margin.
Paresh Vrajlal Dattani
There is no compulsion from the government side to set up any power establishment. But as at 5 rupees a unit we still have to work out and we are working out that going forward, once we get over the four years, how do we tackle this issue and where we are prepared with a lower or even an equal or lower cost of power going forward?
Rushil Selarka
Answer that Silvasa. What will be our power cost?
Paresh Vrajlal Dattani
Silvasa average the. The power cost is close to six rupees.
Rushil Selarka
Six rupees per unit.
Paresh Vrajlal Dattani
Yeah. So Silvasa is about six rupees per unit. And Gujarat is about close to eight rupees a unit.
Rushil Selarka
Okay. And so let’s say. Okay. Hello.
Paresh Vrajlal Dattani
Yeah.
Rushil Selarka
Yeah. So my question is that. Yeah. So will be very indirect impact. Let’s say hypothetically if tomorrow let’s this US US puts a tariff on in India. So will there will there be an indirect impact to us? Like, like though we are upstream players but we are downstream players might you know, face the demand impact so that in a way we will also get impacted.
Paresh Vrajlal Dattani
See we directly there won’t be much of an impact to us. Yes, we do export to the United States even today. And we are competitive enough in both the yarns for technical textiles as well as DTY to import a small quantity every month. But on the tariff front, yes, as it stands today, we are better off than China. And we expect that differential to remain. See, tariffs by number will not impact. It’s only a differential tariff that is going to decide the way it moves forward. And there I think even for us as well as for our downstream that is what we call indirect export is also going to be advantageous.
Rushil Selarka
But don’t you think that there will be a demand impact because of the high inflation and there will be demand slowdown because of that though we will have an advantage compared to the other countries. But in terms of demand, can can it impact us?
Paresh Vrajlal Dattani
I mean when we are in an advantage even if there is a demand issue there because of the higher inflation. Well it’s going to affect us less than the any anybody else. We are as a country we are still going to be better off than any of anybody else there.
Rushil Selarka
And so can you elaborate like how big advantage for us will be the ute with the UK FTA agreement? Like how it will be big for player like us.
Paresh Vrajlal Dattani
It will be a big advantage because averagely the duty that they are charging today is between 9 to 12 and a half percent depending on product to product. Now that 12 averagely 11, 11, 12% duty going away is going to be a big advantage.
Rushil Selarka
And sir, how is the demand going forward? Like if you can just give us some color since our Punjab plant is also coming into an operational from Q1FY26.
Paresh Vrajlal Dattani
Yes, the color I would give you that way is that today as we stand today we as an industry we are operating almost at about 83, 85% efficiency which realistically is close to 90 odd percent because the listed capacity, some of them are not in a position to commission. So I mean we almost as an industry running and well it’s all placed and everybody is moving well. So I, I don’t see any impact of demand coming in from there.
Rushil Selarka
Okay sir. Thank you sir.
operator
Thank you. Take our next question from the line of Sunil Jain from Nirmal Bank Securities. Please go ahead.
Sunil Jain
Yeah, thanks for taking my question. This is more related to your expansion. So this expansion you said that will be in phases. So can you describe what will be the in phase one and then phase two?
Paresh Vrajlal Dattani
Yeah, see we have set up a capacity there which can at peak levels go up to about 950 tons a day of production of polyester filament yarns. As we stand we have divided this into two phases. In the first phase we will be at between 680 to 700 tons per day. And then in the second phase we will be going up to 940 tons a day. That’s how we have divided this phase.
Sunil Jain
And second phase when it will be starting.
Paresh Vrajlal Dattani
FY28 will have the impact of revenue and earnings on the second phase also
Sunil Jain
okay. So right now we are working on this 680. And we had invested money for 680.
Paresh Vrajlal Dattani
700 per day. Yes. So effectively, just to give you a gist, we are today at 200,000 tons of polyester filament yarns. The first phase will give us an additional 250,000 tons. And when we complete the second phase, we’ll be adding another 100,000 tons to that.
Sunil Jain
Okay. And about the subsidy available in this plant. Can you give a idea how much subsidy we’ll be having and how much it can have a benefit on EBITDA per kg of yarn? Like right now you are making around 11 rupees. So how better you can do in that?
Paresh Vrajlal Dattani
No, as far as the subsidies is concerned, two parts. I will break this question into one. Our philosophy, that is that never to plan any project based on government subsidies. Whatever comes is a cherry on the cake. The plant must pay for itself and earn for itself. Having said that, as Punjab, what the government has given us as per our agreement is besides power at five rupees a unit on a discounted tariff they give us net state GST refund which is applicable up to 2 times the FCI in up to a period of 17 years.
And there is a small subsidy based on the number of employees you do for per person. 50,000 rupees per person for a period of seven years.
Sunil Jain
Yeah, that is okay. But how it will get translated into your profitability.
Paresh Vrajlal Dattani
No, we are not looking at whatever number we are working on today. And what we are giving out is but no element of government subsidies in it. Whatever comes out will come out be an additional benefit on the numbers that we put out.
Sunil Jain
Yeah, that’s only I was looking at. It means 1112 rupees. Anyhow, you do so and because of nearing to the customer, you may do some benefit. You may get some benefit on that account of transportation. But apart from that, the additional will be there from the subsidy which you may be accounting on that.
Paresh Vrajlal Dattani
There is nothing on the subsidy there. What advantage we have there? I’ll just put it out again. We have two basic advantages there. One is on the operational side where we are cheaper. When we compare operational, we compare it to our existing plant in Silvasa where we are at 6 rupees a unit of power. Here we had 5 rupees a unit. So that’s going to be an advantage. The other one is that on the heating front for our boilers we use gas here. There being an agriculture belt, we are having the best world’s best solid state heaters from Belgium, Fort Vincke, which is going to result in a saving of 50% on the heating cost and over and above that because of the sheer economy of scale and better fully automation over there, we are going to be lower on manpower, manpower cost.
So that’s on the OPEC side. And the other point that you put forward regarding on the freight component. Yes. As we stand today, out of the 4.4 million tonnes that we produce as a country, which is all produced on the western side of the country, about a million tonnes is consumed annually at these five principal markets in the north. We are going to be the first suppliers there. There’s no other supplier at this point in time there. So effectively every customer There pays about 4 and a half to 5,000 rupees of ton as freight for getting the material from here.
And the cost for us to supply to any of these markets is going to be close to about 800 to 1000 rupees a ton. So there’s going to be an advantage of freight differential and there’s going to be advantage of the OPEX cost.
Sunil Jain
Sorry to happen. Yeah, yeah, it cleared. Just one small thing. I’m not able to get it cleared. So like GST benefit you will be getting. So that will not miss, that will be passed on to the customer or whatever the capital or it will be. It will be accounted in capital subsidy.
Paresh Vrajlal Dattani
When we get the GS GST refund, it’s a net GST payable refund. When we get that refund it’s going to be an extra add to our profitability not passed to the customer.
Sunil Jain
Okay, so that will be an additional, I think on cake.
Paresh Vrajlal Dattani
That’ll be an additional.
Sunil Jain
Yeah. Okay, fine sir. Okay, thank you very much. That was my question.
operator
Thank you. We’ll take our next question from the line of ashish Ubganlawar from InvestQ PMS. Please go ahead.
Aashish Upganlawar
Yeah, Sir, I think someone touched upon this point earlier also but just wanted to understand. I could see in your presentation the customer list that you’ve shown. But I mean indirectly how much of your sales would be kind of, kind of related to someone exporting to the US that way? Because indirectly there could be an impact. So is there a percentage that you could give us that this is the percentage of our sales which is further processed and goes to US markets? Some, some sort of number.
Paresh Vrajlal Dattani
I can give you a number in totality we have a direct exports. If you see over years moving between 5 and 16% depending on year to year, depending on our better netbacks, that’s the direct on the indirect export is what you are referring to. Effectively our calculation tells us that in Generalized we do about 30. 30% of indirect exports. And a portion of that would be to the US But I see that going up only I don’t see that coming down.
Aashish Upganlawar
Okay. Okay. So what we are, I mean hearing from most of the companies involved in. I mean heavily dependent on us. Whether those are textile companies or maybe in other segments that the buyers are kind of bearing only a part of the increase in tariff which is 10% today. So most of the companies are guiding for a margin squeeze. So indirectly I mean that pressure can come to us also if our buyers are facing. Facing the same thing. So how. How should one read the situation from Sanatan’s perspective how things would go from here?
Paresh Vrajlal Dattani
No, I would just clarify this in a different way. If you are trying to say that the customers are bearing a part of the duty cost important the balance, they are putting the seller here at the end of it. Even if they get half of that the net pricing from the seller will go up. So definitely the fabric and apparel guys will be at an advantage. As far as Sanatan is concerned, we don’t see that happening. And we have not received anything from any of our customers today regarding this.
Aashish Upganlawar
Okay. Okay. And secondly sir wanted to understand on our raw material procurement you said I think reasonable would be imported and other would be domestic. So a bifurcation on this would help. And who would be our key suppliers? Would it be maybe Reliance or other other players in the petrochemical aspect here?
Paresh Vrajlal Dattani
At the moment as I mentioned earlier that we are importing about 50, 55% of our raw materials from abroad. And the balance is locally which we source from Indian oil as well as Reliance. Going forward with the new plants starting in the coming year this 50% of imported is definitely going to be come down by a substantial number. As far as our Punjab facility is concerned. Most of our PTA and Meg will be coming from the Indian oil refinery at Manipat.
Aashish Upganlawar
Okay. Lastly sir, I wanted to understand. Historically whatever financials have been available to us we had peak EBITDA of I think 15, 17%. And today we are at say it used to be at say 7, 8% touched and now we are at about close to 10%. So how one should I mean track the track the data which affects your margins either on the positive side or the negative side.
Paresh Vrajlal Dattani
You are right. We had done an EBITDA as much as 18% also and we this was the post Covid years and following that when the war started it dropped down to as low as 7.9% also. But both these were. I would call them non normal years. They are more freak years. Leave them aside. Yes, as we said this year we have done close to 9% EBITDA which we had predicted that we would do close to 9% once we commissioned Punjab at the end of the first quarter we expect to do a revenue. We are not going to get the full revenue out of that plant in the FY26.
So we consolidated as a company level, we aim to do an EBITDA about 10 to 11%. And going forward when the full plan starts and we and the second phase gets completed. Yeah. We aim to do an ebitda close to 12% on that.
Aashish Upganlawar
Okay. Okay. So a normalized EBITDA margin would be around 12% for the company typically.
Paresh Vrajlal Dattani
That’s right.
Aashish Upganlawar
Okay. Okay.
Paresh Vrajlal Dattani
It’s an average ebitda. So we have years which go up and down. But yes, at an average level over a 3, 5 year 7 year phase. Yes, this is what it will be.
Aashish Upganlawar
Okay, sure. Thank you so much sir.
operator
Thank you. Before we take the next question would like to remind participants to press star and one to ask a question. We’ll take our next question from the line of Dhaval Doshi from Diamond Asia. Please go ahead.
Dhawal Doshi
Hello Parish bhai.
Paresh Vrajlal Dattani
How are you?
Dhawal Doshi
I’m fine.
Paresh Vrajlal Dattani
Yeah.
Dhawal Doshi
So just two questions. First is if you can just help me with the ramp up plan of the Punjab plant. And secondly, how are the spreads behaving given the recent fall in the crude prices? How are the overall spreads behaving as far as we’re concerned? Thank you.
Paresh Vrajlal Dattani
Yes. As far as the plant is concerned as I mentioned we are going to commission towards the end of the first quarter. So. So towards the end of June we start. We will start with the capacity of about 350 tons a day. And by the end of the next quarter, that is the September quarter we will have ramped up fully to the 685 to 700 tons per day. That’s the first one.
Dhawal Doshi
Second half of this financial year is VC Pol utilization. Right?
Paresh Vrajlal Dattani
That’s right. That’s true.
Dhawal Doshi
Okay.
Paresh Vrajlal Dattani
And as far as the drop in crude prices. Yes. They have impacted us positively in the way that because of the sheer volatility and the steep drop and climb we have been able to retain and increase our margins. And I see that going forward the crude being remaining in this area, this deltas will only move up northwards.
Dhawal Doshi
Great. Just in terms of the commissioning cost for the new plant. What could be the upfront commissioning cost that we could, we may have to face which, which may not be recurring in nature.
Paresh Vrajlal Dattani
No, see the commissioning cost as such is just that when we start up we are starting at a lower capacity of 350 tons. Our peak cost utilization will come when we come to that. 675, 700 tons per day. But that’s not going to be a major impact on the cost.
Dhawal Doshi
And lastly when you said the spreads are improving any number that you would want to put in over here, probably in terms of EBITDA per kg or whatever ways you would want to.
Paresh Vrajlal Dattani
As you’ve seen in our numbers from the third quarter to the fourth quarter we are gone up by about 110 basis point on the EBITDA. And we I think going forward the quarter we also would be up by about a similar number. And going forward with the Punjab facility commissioning and the inherent advantages that I explained earlier to another question with that. Yes, that’s why I said we aim that this quarter considering the cost of startup, what you mentioned everything we aim to do between 10 and 11% for the year FY26.
Dhawal Doshi
Thank you so much sir. And all the best.
operator
Thank you.
Paresh Vrajlal Dattani
Thank you.
operator
We’ll take our next question from the line of Marshall and individual investor. Please go ahead.
Marshal
Yeah. Since you mentioned that in the Q1 like we will be commissioning the plant and by the Q2 it will be about 350 ton and by Q3 it will be full. So it means if you take it like for example weighted average, so almost you can say like when this capacity is 250,000 so almost 200,000 will be utilized or because 780,000 will be utilized. So it means can we say safely that our turnover should at least grow by 80% this year as compared to FY25?
Paresh Vrajlal Dattani
No, we will get an output. We are estimating we will get about 65% of the total capacity that we will get when next year we will get the full capacity which will give us an additional revenue of around 3000 crores. This year we will add about between 151600 crores to 1800 crores. So we aim to close FY26 at a revenue top line of 46, 47 4800. And we aim to do an EBITDA of 10 to 11% of that.
Marshal
Okay. And you mentioned that this PTA plant will be commissioned by IOC and with the second reliance on somebody else. And like when is the. And when is the expected date of missing for Each of these plants. Sorry,
Paresh Vrajlal Dattani
Gale India is the second plant. But Gale.
Marshal
Okay.
Paresh Vrajlal Dattani
Into production by of FY20 of the calendar year 26.
Marshal
So Gail is coming in this quarter. Sir.
Paresh Vrajlal Dattani
In the first quarter of calendar year 26.
Marshal
Oh, so it’s like within June.
Paresh Vrajlal Dattani
Yeah. You know in January of 26.
Marshal
Ah. January 26th. Okay. Okay, fine. Okay. So. So still about six month ahead. Okay, that’s fine. Okay. And then you also mentioned about this. Sorry, please continue. Hello.
Paresh Vrajlal Dattani
IOCL plant is expected. IOCL plant is expected to commission somewhere middle of 26.
Marshal
Okay, fine. That. That’s enough. And then you also mentioned about this GST subsidy or GST benefit in Punjab plan. So it was not much audible. Can you please repeat it?
Paresh Vrajlal Dattani
No, we. The. The agreement between us and the government says that they will give us a refund on the net state GST payable up to 2 times the capital investment over a period of 17 years.
Marshal
Okay. So that will use. So almost about a 6,000 crore something you will get.
Paresh Vrajlal Dattani
But this will be applicable only on the net state GST pair.
Marshal
Okay. Okay. Limited up to the state gst.
Paresh Vrajlal Dattani
Yes.
Marshal
Yeah. Okay. And my last question is that. I mean say how do you see this demand scenario with respect to. To the Punjab plant? Like whether the offtake will be like immediately marketed or like. Or will it like form sort of some surplus supply there? Like what the demand ends up execution for the PFI there.
Paresh Vrajlal Dattani
As I mentioned earlier, almost a million tons is consumed there between the five principal markets in the north. And as we stand today, what we are setting up in the first phase is about 50 to 25% of that capacity. So our material being the local supplier and the just in time supplier. And with the freight advantages we are placed from day one. So we don’t see a challenge in placing the material there. The 75% of the balance will still be coming from the west. Challenge in placement of options.
Marshal
Okay. And my last question with it, since it is a mega plant, considering size of our company. So what kind of risk do you foresee and how do you plan to mitigate those risks?
Paresh Vrajlal Dattani
No, we. Because see in this sort of a plan. I’ll just give you this answer in a different manner. That when my team decided to make a business plan for this growth, they decided for Silvassa. We only shut it down for this reason. That though it was easier and less effective for us because we didn’t want to produce and then go out to sell. So here at least we are the material is placed from day one. We are not In a position to go out and sell so we can utilize our assets fully. So I don’t see any challenges there.
The plant is coming up well there and we are well on time as promised that we will commission in the. First quarter
Marshal
in terms of technology absorption. Everything will find. Right.
Paresh Vrajlal Dattani
Yes. Because the technology. We have got the latest technology available in the world. I mean from the best suppliers of the respective equipments. Like we’ve got the spinning lines from Bamak, Germany. We’ve got our CKCEC Chinese supplier who are the leading suppliers of polymerization. We got our DTY machines from Germany as well as India. We have got our automation from Salburg, Italy. We have got our post production automation from Craftsman. So we have the best available technology in the world with us which will give us efficiency as well as the. Cost of opex
Marshal
like you have fantastically elevated all the question, my humble submission to here is that since it’s a mega plant in a new geography. So I would request you and the board and this audit committee to have the. To have this strongest possible like you can say internal control, financial control and the corporate governance so that there is no leakage of any revenue or any cost inflation. Nothing is there?
Paresh Vrajlal Dattani
Yeah. I appreciate your suggestion and it’s well noted and we are already taken cognizance of that and we are following in that direction. But having said that, yes, it’s a good suggestion. Thank you for that.
Marshal
Thank you sir. Thank you.
operator
Thank you. We’ll take our next question from the line of Varun Kajaria from Omkara Capital. Please go ahead. Varun, we cannot hear you clearly. Can you use your handset mode please?
Varun Gajaria
Yeah. Hello. Audible now.
operator
Yes, yes, please go ahead.
Varun Gajaria
Yeah, so thank you for the opportunity and congratulations on a good set. So just wanted to get some clarity that from a notice textile pays. If we’ve been hearing that that recovery, the recovery of demand probably looks little. I mean demand looks a little tentative for now probably in the first half of this year. So what is. Sorry,
Paresh Vrajlal Dattani
no, there is some echo coming from behind. I’m not able to hear you clearly. There is some other sound coming in. Please can you repeat that and just ensure that the sound is there?
Varun Gajaria
Yeah.
operator
Are you on any Bluetooth?
Varun Gajaria
Yeah. Is it better now?
operator
Yeah, just remove the Bluetooth and speak from your hand.
Varun Gajaria
Yeah, I’m on the handset mode right now. Is it better? Okay. That lately we’ve been speaking to a lot of textile players and the commentary we’ve been getting is, is that the first half will be. Will be slightly Tentative given the, given the tariff related uncertainties. So what is your, your take on the. Do you think that after the first half of the. After the first phase of our capacity comes in, it will be able to soak in all the demand. The demand will be able to soak in all the supply that we’ll be throwing out?
Paresh Vrajlal Dattani
Yeah. I would put this a little differently. The second half you will see the impact of the tariffs, FTAs, whatever, lot more than you will see in the first half. Yes, but I mean without this tariff business also the downstream people were able to send their apparels and garments and that is only increasing day by day. Today, if I have my information correctly, the downstream apparel people’s order books are relatively strong today.
Varun Gajaria
Okay. Okay. So. So we are confident that, that whenever the capacity of our capacity comes in, do we have a tie up as such in terms of order book? Or, or will it be. Or will it be basis the capacity that comes out?
Paresh Vrajlal Dattani
No, in, in. In our business it’s the order book is such that suppose somebody gives us an order for a month’s supply or two months supply. Yes, the supply is noted but the pricing is changed every 15 days.
Varun Gajaria
Okay.
Paresh Vrajlal Dattani
So yes, the order books are relatively normally for 15, 20 days only.
Varun Gajaria
Okay. And what kind of arbitrage is is there between export price of India of polyester yarn from India and that from China? What kind of difference is that?
Paresh Vrajlal Dattani
Yeah, there is. There are two parts to this. Their pricing also is very dynamic in the sense that when they got hit by the tariffs, yes, they did lower the prices. Otherwise they once the settlement done between them and USA they have increased the prices accordingly. But the prices are one part. The other part is also the FDA agreements. The freight cost to different countries from India and China also makes an impact net on the pricing. So it’s a very dynamic situation there. I cannot compound to one particular aspect and tell you.
Varun Gajaria
Right, right. Okay. Okay. Thank you so much and all the best for coming quarters. Thank you.
operator
Thank you. We’ll take our next question from the line of Ashutosh Nimani from JM Financial. Please go ahead.
Ashutosh Nemani
Yeah, thanks for the opportunity. My question is
operator
please use your handset model.
Ashutosh Nemani
Yeah. Am I audible now?
operator
A little better.
Paresh Vrajlal Dattani
Yeah.
Ashutosh Nemani
So my question is on the like on our roc, considering we are doubling the capacity on the polyester side, wanted to understand like what kind of yarns would it be more value added offerings. So do we anticipate our return on capital employed increase and if you could provide ROC based on segment by polyester, cotton and technical textiles.
Paresh Vrajlal Dattani
See, as far as the value added, that is a journey, that is a constant journey which we go on. It’s not a one day thing that we planned today and we started. Yes, having said that, when we start the plant we don’t add so much of value added material and then over a period of time we go ahead and do that. So that’s your answer for the value added material. And your second part of the question was what I missed you over there.
Ashutosh Nemani
If you can provide like what kind of return on capital employed we generate on polyester yarn manufacturing, cotton yarn manufacturing and technical. All the three segments do we have.
Paresh Vrajlal Dattani
We don’t look at it that way. We look at it as a company on the whole. And that’s the advantage of having three verticals because we have seen over years that one vertical, if it provides a little better, I mean lower ebitda, the other one takes care of that. So we look at it rather than an individual business. And that’s why we keep growing all the three segments over years to maintain this balance. What we have.
Ashutosh Nemani
My second question is on the like, we also manufactured recycled yarn. Wanted to understand where do we source those arpit chips from and what percentage does it contribute?
Paresh Vrajlal Dattani
No, it’s a very small. We have just ventured on that journey of recycled yarns. We buy our flakes from abroad, we import it and we sell it. But it’s a very small journey. It’s a very small component. Today the idea to be there is that as and when in the next couple of years when it blows up this recycled business, we are there if we have established ourselves. That’s the whole idea. Not a more revenue idea today, but it’s a more idea of being there when we need it.
Ashutosh Nemani
Behind importing it. Considering arpeg chips like there are many domestic recyclers also that are in this business. So any particular advantage they get from importing it and not choosing the domestic?
Paresh Vrajlal Dattani
Yes, there are even three. And whereas imported also there are chips, recycled chips available from different players with different pricings. So we are, whatever we have bought, we are happy with our supplier in terms because of the product that it gives us an edge over. Okay, no pricing, not saying that anybody is less, but this is what we prefer and this is our philosophy of doing it.
Ashutosh Nemani
Okay, thanks a lot.
operator
Thank you. We’ll take our next question from the line of Pranav from Prudent Equity. Please go ahead.
Pranav
Hello.
operator
Yes, please go ahead.
Paresh Vrajlal Dattani
Yeah, yeah.
Pranav
My question, yeah, my question was what kind of finance cost can we expect like annually considering like the debt has ballooned up and you probably need some working capital financing.
Paresh Vrajlal Dattani
Yeah. I will ask Sanjay bhai to answer this for you.
Sanjay Anirudh Shah
Yeah. Expected finance cost going forward would be close to 80, 85 crore on account of the term debt of the Polycod project in Punjab and minor cost account of working capital limit utilization at Silvas.
Pranav
Okay so. Okay. And how confident are we of the commit of the plan commissioning?
Paresh Vrajlal Dattani
Come again. I miss you. How confident are we? Hello.
Pranav
Hello. I’m audible. Hello. Hello.
operator
Please.
Pranav
How confident are we in commissioning the plant? Best water.
Paresh Vrajlal Dattani
We are very confident. We almost there. We round the corner for commissioning by the end of the first quarter and it will take, as I mentioned earlier it will take us one quarter to move from that 350 to 700.
Pranav
Okay. All right. Thank you so much.
operator
Thank you. We’ll take our next question from the line of Rochel Salarka from Pink Wealth. Please go ahead.
Rushil Selarka
Hello. Yeah. Yeah, yeah, yeah. So can you just help us with an understanding that you know since our power cost in at salvasa plant is 6 rupees per unit so is there any way that you know we can reduce those power costs by you know procuring more of renewable source of energy? Just wanted to understand.
Paresh Vrajlal Dattani
Yeah, See on paper. Yes, but effectively when, because at six rupees a unit and with the variable cost that the local discoms and the local administration puts. It’s not a very feasible thing at this moment in time. But we are still working on that. And as I mentioned earlier regarding Punjab, we have that five rupees for four years there also we are working that going forward post four years. How we are going to mitigate to bring it at five rupees or cheaper than that.
Rushil Selarka
Okay. So and so our interest cost for the next year is 80, 85 crore. Right?
Paresh Vrajlal Dattani
Yeah, 85 crores.
Rushil Selarka
And depreciation will be somewhere around 45 to 46 crore. It will be the same run rate or there will be an increase in depreciation also.
Sanjay Anirudh Shah
Increase in depreciation also on account of the Punjab plantation.
Rushil Selarka
Okay so sir, can you just give us like what can be a depreciation?
Paresh Vrajlal Dattani
Yeah. So you can add another 715 crore. 70 crores for that also.
Rushil Selarka
And sir, currently this year we have made an ebitda margin of 9% for the full year. So do are we gonna expect for the next year to make it to double digit?
Paresh Vrajlal Dattani
As I said because of the inherent advantages that we have at Punjab on the operational as well as the being the local supplier and the logistics advantages yes. And the way we see the market going. Yes, we are definitely going to be there in the double digit going forward.
Rushil Selarka
Okay, sir. Thank you, sir.
operator
Thank you. We’ll take our next question from the line of Harsh Mittal from MK Global. Please go ahead.
Harsh Mittal
Thank you. Good evening, sir. And the team. Firstly, congratulations on the good set of numbers and achieving the guidance which was given earlier. My question is that what is the small question and sorry if I missed it in the earlier opening remarks. What is the consolidated net debt as on the end of FY25?
Paresh Vrajlal Dattani
The net debt is 1050 crores as of 31st March 25th.
Harsh Mittal
And gross debt.
Paresh Vrajlal Dattani
1084 crore.
Harsh Mittal
Thank you. Thank you.
operator
Thank you. We’ll take our next question from the line of Harshit Sachdeva from Columbus Capital. Please go ahead.
Harshit Sachdeva
Hi. Am I audible?
Paresh Vrajlal Dattani
Yes, you are.
Harshit Sachdeva
Hi, sir. Sorry. New to the company. Just was going through your historical. So we’re seeing FY22. We’ve never really recovered from the peak sales and EBITDA margins and profits that we just said in that year. So any reasons why it’s come down over the next three years?
Paresh Vrajlal Dattani
Yeah. As I mentioned earlier that FY20 to 18% EBITDA, that’s the post Covid pent up that we had across all industries. So it was because of that, I won’t call it as a very normal EBITDA and post that we had the two wars that came up which affected not only the direct exports of the country but also the indirect export which also resulted in lower, I mean more pressure locally. But having said that, in spite of that, the good thing was that the team was able to still run the plant fully. We stressed our assets even in those years and we were able to place some materials even in those years.
Harshit Sachdeva
Okay. Okay. Got it. Thank you, sir.
operator
Thank you. We’ll take our next question from the line of Ashutosh Nimani from JM Financial. Please go ahead.
Ashutosh Nemani
Yeah. Is it better now?
operator
Yes. Please go ahead.
Ashutosh Nemani
Yeah. Actually by when will the technical textile capacity double? In our initial comments we told right. Technical textile capacity to double from 9,000 to 18,000.
Paresh Vrajlal Dattani
Yeah. So entire revenue of that will come in FY27.
operator
Thank you. Ladies and gentlemen. We’ll take that as the last question for today. I now hand the conference over to Mr. Paresh for closing comments. Over to you, sir.
Paresh Vrajlal Dattani
Thank you. I thank the entire team at Sanatant Exiles for the untiring efforts and all our stakeholders for the continued support and faith in our company. This is all from our side and I would again like to thank you all very much for your time and attention in attending the call. Thank you very much.
operator
Thank you. On behalf of Sanatan Textiles limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Paresh Vrajlal Dattani
Thank you, Sam.