Sangam (India) Ltd (NSE: SANGAMIND) Q4 2026 Earnings Call dated Apr. 23, 2026
Corporate Participants:
Anurag Soni — Managing Director
Analysts:
Mehal Gogia — Analyst
Saransh Gupta — Analyst
Rehan Saiyyed — Analyst
Athar Syed — Analyst
Rahil S. — Analyst
Kamal Jeswani — Analyst
Rohit Ohri — Analyst
Madhur Rathi — Analyst
Ankur Kumar — Analyst
Vikram Duggar — Analyst
Vikas Gadak — Analyst
Avinash Nahata — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Sangam (India) Limited Q4 and FY ’26 Earning Conference Call hosted by Go India Advisors. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. Mehal Gogia from Go India Advisors. Thank you, and over to you, Mehal.
Mehal Gogia — Analyst
Thank you. Good afternoon, one and all. It’s my pleasure to welcome you on behalf of Sangam (India) Limited. Thank you for joining us today for the quarter four and financial year ended 2026 earnings con call. This call is being hosted by Go India Advisors. Please note that today’s discussion may include certain forward-looking statements, therefore, they must be viewed in conjunction with the risks that the company faces.
Today, on the call, we are joined by Mr. Anurag Soni, Managing Director. I now invite Mr. Soni to present the company’s business and outlook, after which, we will open the floor for Q&A. Thank you, and over to you, sir.
Anurag Soni — Managing Director
Good afternoon, and thank you for joining us today. FY ’26 has been a defining year for Sangam. We have crossed INR3,200 crore in revenue. We more than doubled our PAT to INR83 crores. Our domestic business remains strong and our exports hit an all-time high. And perhaps most importantly, every single quarter this year was better than the last. Q1 to Q2 to Q3 to Q4, revenue, EBITDA and PAT all moved in one direction.
To put that in perspective, in Q4 alone, we delivered INR880 crore in revenue, and EBITDA of INR98 crores and a PAT of INR33 crores. Our quarterly PAT was nearly what we earned for the full year in FY ’25. That consistency is not accidental. It reflects disciplined execution, deeper operational efficiency and an organization that is genuinely getting better at what it does. These results reflect work that has been building for some time. The last two years were demanding for Sangam and for the industry. FY ’26 was the year we rebuilt. We stabilized our operations, sharpened our execution and earned back the momentum this business is capable of. What you are seeing in these numbers is the result of that work. And we are just getting started.
This year we have embraced a simple principle: better than before. Every quarter, every process, every metric, one question: are we better than last time? That is what you saw play out in FY ’26. And it is what I am confident you will see play out over the next four quarters as well.
Our balance sheet is in good shape. We are carrying roughly INR200 crore in treasury. Our working capital cycle improved dramatically from 80 days to 55 days in a single year. Interest coverage is improving. We are maintaining a net debt-to-equity ratio of about 1.1 times, ensuring a prudent and stable capital structure.
On the energy front, we are doing significant work to secure our energy costs through renewable solutions. And this will remain a consistent theme for us going forward. This is a structural reduction in our cost base that will show up in our numbers in the coming quarters. Our backward integration into recycled polyester fiber is also a point of quiet pride. We are now meeting approximately 50% of our polyester fiber requirement through in-house recycled production, processing close to 40,000 metric tonne of plastic waste annually. This is sustainability and cost leadership working together.
Across all our segments, we have built a deep understanding, each with its own customers, its own dynamics, and its own room to grow. Our job is to keep making each of them better. That is what drives us.
Last year, we doubled our PAT. We aspire to do that again in FY ’27. I use the word aspire deliberately, and I mean it in that way. What I can say with confidence is that the journey from here has a clear direction. We are a manufacturing business, and capacity is the foundation of growth. The investment cycle that we undertook to build capacity is now largely behind us. And those assets are running at very high utilization across all our segments. That’s a good problem to have. And it tells you where we are in our journey. The next leg of growth will require investments, and we are preparing for that. We will share more as plans mature.
Sangam is at an inflection point. The global supply chain is reorienting. Buyers, both domestic and international, are looking for reliable, integrated, and quality manufacturers with the skill and credentials to deliver consistently. Sangam is exactly that. The opportunity in front of us is significant, and I believe we are well positioned to capture it.
I want to close by thanking our employees, our customers, our partners, and our shareholders. Your trust is something we take seriously, and we intend to keep earning it. I’m deeply confident in our ability to keep improving quarter after quarter. We are not chasing a single number or a single event. We are building a business that compounds.
With that, I’m happy to take your questions. Thank you.
Questions and Answers:
Operator
Thank you so much, sir. [Operator Instructions] Our first question comes from the line of Saransh Gupta from SVAN Investments. Please go ahead. Mr. Gupta, I’m sorry, but you are not audible. Mr. Gupta, please proceed ahead with your question.
Saransh Gupta
Hello.
Operator
Yes. I’m really sorry, but your voice is not audible. I request you to please rejoin the queue. Thank you. The next question comes from the line of Rehan Saiyyed from Trinetra Asset Managers. Please go ahead.
Rehan Saiyyed
Hello. Good afternoon. Thanks for taking my question. I have a couple of questions. First, on the export side, we have seen in quarter four that exports have reached an all-time high this year. So, could you help us understand which geographies or customer segments are driving this growth and how sustainable this momentum is as we have to look further? This is my first question.
Anurag Soni
Hi. So, you said two questions. So I think this is — you have asked regarding the exports geography. Is there another question?
Rehan Saiyyed
Yes, I have a few more questions. You can go one by one or I can go to all of them together.
Anurag Soni
Okay. No problem. I can answer this. So, the export geography is quite diversified. So, we are exporting to, I think, about 50-plus countries. So, we have a very balanced export portfolio. And so, we are not really heavily dependent on a particular geography as such. So, to answer that sustainability part, I believe that our exports are pretty sustainable. And we are seeing a continuous uptake there. So, every quarter, we are improving our export numbers and markets. So, it is a very sustainable number.
Rehan Saiyyed
And if you we want to hear more that in which — from which geographies we are getting more traction, if you can — you want to put here?
Anurag Soni
See, this depends on — and across segments and products. So, like some products, the East side like Bangladesh and China are big geographies. On some products, Africa, Egypt, Turkey are a big geography. Some products, Latin America, South America are important. So, it depends on product to product. So, it’s not like there is one particular country where we are heavily dependent on. It is across geographies.
Rehan Saiyyed
Okay. And my second question is around your EBITDA margin. Like, I want to get a bit idea that if the company has increased its renewable energy capacity, with additional solar and hybrid projects, so, if you can show the ballpark number, by FY ’27, what percentage of total power requirement do you expect to be linked to renewable resources? And how should we think about the full impact on EBITDA margins?
Anurag Soni
Well, I think as far as the renewable solutions are concerned, I think a lot of things are under process as we speak. And so, currently, there are about 10%, 15% of our needs are coming from renewable. Probably, I think in a year’s time, let’s say June next year is when we expect that about 70% plus of our power will be renewable. So, we’ve also put that in our presentation. I think the cumulative benefits to the EBITDA once everything is commissioned would be about INR50 crores to INR60 crores annually. So, for all benefits to kick in, it will take about four to five quarters from now.
Rehan Saiyyed
Like, you are saying, it will take time to transfer in EBITDA at least four to five quarters going forward, right?
Anurag Soni
No, because we’ve undertaken capex somewhere. We’ve done some PPA somewhere. So, for everything to commission and come into effect, so currently, we are about 15% of our power needs are coming from renewable. This will be 70% plus in five quarters from now. So, every quarter, we will have some kind of addition.
Rehan Saiyyed
Okay. My next question is around the garment segment. It still contributes a relatively smaller portion of revenue despite being a high value-added segment. What are the key bottlenecks in scaling this segment initially going forward? Is there any opportunity that you are evaluating here?
Anurag Soni
Well, see, if you see our garment segment, I think operationally, we are doing a lot better. We are at higher capacity utilizations compared to the last six to eight quarters. So, we are operating at better utilization levels. We are almost at 50% now, and we expect that number to further go up. So, we have addressed a lot of challenges in the business over the last year, and I think we are in a good space today to further improve on the utilization. So, sales have picked up significantly over the last quarter, if you see our numbers, it’s again in our presentation, and the utilization levels have also gone up. I would imagine that, that would continue happening on the upper side.
Rehan Saiyyed
Okay. Okay. And last one bookkeeping watching from my side. My last question is your company has built a strong integrated model from fiber to garment that we have seen. So, are there still any gaps in the value chain where you see further backward or forward integration that possibly we can evaluate going forward?
Anurag Soni
See, I think, as I mentioned in my opening remarks, that there will be certain segments where we have to improve upon, and there will be some investments that we will have to plan. So, both on the backward integration side, there will be things on the — so, today we have about 50% of our polyester that comes from in-house production, and 50% we are still buying from the market. So, we would like to build on that to have better control on costs and raw material security. Same for our denim fabrics. I think over 50% of our raw material is in-house, and about 50% are buying from outside. So, we’ll probably increase some more capacities there.
And on the energy side, we have to — the work is already on. So, as I mentioned earlier, the question when you asked about energy, so that work is on. And then probably to — there will be some capacity additions that we will do across the segments. So, a lot of things are under discussion and planning, since you can see our capacity utilizations are pretty high. So, I don’t have anything concrete to say now, but there will be something, and as and when that comes in, we will announce that.
Rehan Saiyyed
Okay. Okay. That’s it from my side. And I’ll jump back in the queue.
Anurag Soni
Thank you.
Operator
Thank you. Our next question comes from the line of Saransh Gupta from SVAN Investments. Please go ahead. Mr. Gupta, you may unmute and proceed ahead with your question.
Saransh Gupta
Yeah, hi. Am I audible now?
Operator
Yes, you are.
Anurag Soni
Yes.
Saransh Gupta
Yeah, hi. Thank you. Thank you for the opportunity. And congratulations, sir, on an outperforming quarter.
Anurag Soni
Thank you.
Saransh Gupta
So, I have a couple of questions. Basically, I wanted to first [Technical Issues] going on in the PV yarn. Like, in this quarter, we know that there was some disturbance in the shipments that came through. So, how has the spread improved, and what are they currently?
Anurag Soni
Sorry, I think your question — like your voice got distorted in the middle. If I can capture the question correctly, you asked something about the PV margin — PV yarn margins, and how that business is going with regards to the current disturbance. Is that correct?
Saransh Gupta
Correct, correct, correct. And like, in this quarter, or probably in the month of March, how have they done in times of volatility?
Anurag Soni
Right. See, PV yarn side, about majority of our business actually comes from the domestic market. About 10%, 15% comes from the export side. So, there was probably some delays in shipments. I think 10% or 15% of our exports might have been delayed in March on the shipments, and then some costs on the freight have also increased. However, it’s not a material impact on the overall business, since that volume is not very high in the region where disturbances are there. So, we’ve had a decent quarter on the PV yarn side, and even the month of March was very decent. So, until now, we are being able to manage the situation, and things are under control.
Saransh Gupta
So, for the inventory, you are not facing any issues?
Anurag Soni
No, I think — so probably, on the inventory side, we might be at a multi-year low. So, no, that’s not a challenge.
Saransh Gupta
Okay. Do we have sufficient demand in this segment? For the domestic, as you said, 10%, 15%?
Anurag Soni
Yes, there is sufficient demand. There is no challenge there.
Saransh Gupta
Basically, I wanted to understand how has the customer — probably, how has their mindset changed? Like, are they pulling [Technical Issues] as of now?
Anurag Soni
See, I think for the yarn business, while domestic demand is strong, and exports to markets like Turkey and in that region, see, the costs for production are going up there. So, I think in any case, like year-on-year, that business will shift towards the domestic side because domestic manufacturing is cheap. So, instead of exporting yarns, we’ll probably start exporting fabrics more. So, yarn side, exports is not a very big worry. And anyway, like, by strategy, that number is reducing year-on-year anyway. So, domestic demand is okay. And since — instead of yarn, the shift is more towards fabric on the export side. So, this is not a very big issue.
Saransh Gupta
Okay. So, my next question was, though we have been growing our presence in the garment segment, but still, what is the need or do we have that [Technical Issues] 65 to 70 and by when we can do that?
Anurag Soni
Sorry, your voice got disturbed. I could not understand that question. Can you repeat again?
Saransh Gupta
Hello?
Operator
Mr. Gupta, I’m sorry, but we are not able to hear you.
Saransh Gupta
Hello? Hello?
Operator
Yes, Mr. Gupta. Please proceed.
Saransh Gupta
Am I audible now?
Anurag Soni
Yes.
Operator
Yes.
Saransh Gupta
Basically, the question was, like in the garmenting segment, though we have seen [Technical Issues]. So, like what do we need to make it reach to somewhere around 65 to 70 and by when can we do that?
Anurag Soni
So, I could understand the first part there, I think you were asking about the garment capacity utilizations has improved, but can you repeat the last line again? Like, what do we need to do for?
Operator
Mr. Gupta, we are really sorry, but again, we lost you. We are not able to hear you properly. Mr. Gupta, you may rejoin the queue again and make sure that you fix your network, please.
Thank you. Our next question comes from the line of Athar Syed from Smart Sync Services.. Please go ahead.
Athar Syed
Hello, sir. Good afternoon. Am I audible?
Anurag Soni
Yes, you are.
Athar Syed
Thank you for the opportunity and sorry, sir, if I ask something very basic question because I’m very new to this company. So, I firstly wanted to understand, like this time we saw great revenue upside as well as growth in our PAT basically. So, what is the main reason behind this?
Anurag Soni
See, I think I would probably attribute it to two things. One, capacity utilizations are high, so that has led to the volumes. And with capacity utilization and better operational efficiencies, PAT has gone up.
Athar Syed
Okay. And, sir, I wanted to know, right now, our capacity utilization for yarn is 95%. If I’m not wrong?
Anurag Soni
Yes, that is correct.
Athar Syed
So, going forward, do we have any capex in pipeline?
Anurag Soni
So, I did mention earlier in my call that there are discussions that are ongoing. So, I don’t have anything concrete now. As and when we finalize something, we’ll announce that.
Athar Syed
And do you also have plan, how you will finance this, through internal accruals or through debt by preferential issues?
Anurag Soni
See, that is a problem to discuss. Probably once we are sure what we want to and how much we want to invest into new capex — but, yeah, as of now, we have no plan for any kind of preferential issues.
Athar Syed
Because — I’m asking you just because, as of now, we have already achieved around 95%. So, if we can plan as soon as possible, it would be great. And I wanted to understand, sir, if I’m not wrong, this time our PAT — because this time, we saw significant growth in our PAT. So, what I understood is, like, because of this U.S.-Iran war, what I understood is the prices of yarn and other cotton and all of these prices gone up. So, those players who have a good inventory pile-up or a good inventory, they got good benefits. That’s why some yarn players and other players saw good PAT growth. So, if I’m not wrong, is this correct? Like, we gained this PAT growth basically mainly because of inventory, like, we have inventory and we pass on the prices, basically, high prices. We took a benefit of high prices, if I’m not wrong.
Anurag Soni
Well, so, first part, due to the war, prices have gone up, and they are going up. That is correct. However, we are discussing March quarter results. So, war actually started probably I think 1st of March, 20th of February. And we normally operate on an order book of 60 to 75 days at any point in time. So, I would not agree that the current quarter PAT is driven by any kind of one-time inventory gain because you always have an order book as well. And that order book is getting serviced with — these are orders that were probably booked in January, February. That was pre-war situation. So, prices are going up. There is no doubt about that. However, I will not say there is any kind of inventory gain that has come into the PAT for the March quarter.
Athar Syed
Okay. And usually, how much…
Operator
I’m sorry to interrupt you, Mr. Syed, but please rejoin the queue for more questions.
Athar Syed
Okay, okay. Thanks.
Operator
Our next question comes from the line of Rahil S. [Phonetic] from Sapphire Capital. Please go ahead.
Rahil S.
Good afternoon. Am I audible?
Anurag Soni
Yes. Good afternoon.
Rahil S.
Yes, sir. So, firstly, with this aspiration you’ve given about doubling the PAT again in FY ’27, I’d just like to get a flavor on what sort of revenue growth are you targeting and, given your utilizations are like at a peak level in almost all your major segments, so, what will drive this — the growth which you are targeting?
Anurag Soni
See, I also mentioned along with that, that this is an aspiration. And we started my statement from that we have bettered every quarter in the last year. So, we are continuing on that same theme that we have to keep getting better every quarter. So, it’s a very simple math that you multiply with that number and some kind of gains on the energy cost and some kind of gains on the operational efficiency and it will take you somewhere close to that number.
Rahil S.
So, fair to assume a strong mid-teens growth or maybe more in terms of top line in FY ’27?
Anurag Soni
So, top line I think growth will be similar to what we did last year. Again, like what we did in Q4 and at similar capacity utilization, there will be top line growth. However, there cannot be abnormal growth on the top line because capacity utilizations already in the March quarter are high. So, probably whatever the March top line is, we probably multiply that by four and some kind of inflation because prices are going up. So, there will be some top line growth for sure.
Rahil S.
Okay, so it’s fair to say FY ’27 will be a big year for you in terms of your bottom line and the margins, whereas top line will not be exponential. And then this capex you are expecting to conduct in FY ’27 first half or second half?
Anurag Soni
See, again, mentioning that we want to get better every quarter. So, we will probably celebrate every quarter as and when it comes. Definitely, FY ’27 should be a good year for us. As far as the capex is concerned, we’ve kind of come at the back of a big capex cycle three years ago. And today, we are at high capacity utilizations. So, we’ll probably take a quarter or something to plan further that what we want to do over the next couple of years, and then take that into action. So, any kind of capex that we undertake, any kind of financial benefits will not come in the coming financial year. It’s probably — there will be some benefits on the energy cost side, but any kind of new capex growth, the benefits for that will probably start flowing from next year. Nothing in this year, for sure.
Rahil S.
Okay, that’s it. Yeah, got it. Okay, I’ll get back. Thank you so much.
Anurag Soni
Right.
Operator
Thank you. Next question comes from the line of Kamal Jeswani [Phonetic] from U First Capital. Please go ahead.
Kamal Jeswani
Yeah. Hi. Thank you for providing the opportunity. Congratulations on a great set of numbers.
Anurag Soni
Thank you.
Kamal Jeswani
I just wanted to know the margin outlook for the current quarter. If you can give us whether we’ll be maintaining or growing the margins?
Anurag Soni
For the June quarter?
Kamal Jeswani
Yeah.
Anurag Soni
See, it’s difficult to give a number on that, but I did say that we’ll get better from the last quarter. So, definitely, we would like to maintain the margins. See, very short term, very difficult to say anything because with so many uncertainties around in the world, so difficult to give an exact number. But, yeah, I think we should be able to maintain or better our margins from the March quarter, for sure.
Kamal Jeswani
Okay, thank you. And the second question is, how — we see that there’s still some more capacity utilization scope left in the garment business. So, are we also planning to increase the capacity utilization this quarter from the garments? And what is the second question — second part of the question is regarding the brand — our brand, C9 brand. What percentage of the total garment capacity is coming from the C9 brand, and how much is coming from the contract manufacturing?
Anurag Soni
Right. Yeah, I think we can expect better capacity utilizations going forward as far as the manufacturing side is concerned. Now, on the C9 brand, about 40% to 45% of the garment business is contributed by the C9 brand, and the balance is contributed by contract manufacturing.
Kamal Jeswani
Got it. Thank you so much. I have more questions. I’ll come back in the queue.
Anurag Soni
Thank you.
Operator
Thank you. Our next question comes from the line of Rohit Ohri from Progressive Shares PMS. Please go ahead.
Rohit Ohri
Hi, Anurag, congrats on this good execution for the quarter and the review as well as the entire year. Sir, I have a few questions.
Anurag Soni
Thank you very much.
Rohit Ohri
Sir, I have some questions. Continuing with the export question which earlier participant had, is this due to some sort of temporary order shift, or is it because of China Plus One or maybe some currency tailwind that has come through?
Anurag Soni
No. See, I don’t think that there is any kind of like a one-time jump in any kind of sales numbers. See, this is probably like over a period of time, you are working to grow on markets and so there is a continuous growth that is happening, so it is not that some kind of one-time shift is coming from somewhere or it is due to China or — I would not attribute it to those reasons, I think probably there is a supply chain that you build and once you get into established developed markets, it takes time to get into the bigger brands and once the confidence builds, the orders flow better. So I would say that it is a continuous process that is happening and if you see our numbers on the export side, probably every quarter we are doing better on that.
Rohit Ohri
True that. So is it because you have added new customers, or is it because of the old customers are giving you a higher wallet share?
Anurag Soni
I think both are happening together because with volume growth, the old customers where we already have a significant market share, it is difficult to grow a lot on that front, so there is some addition on new customers as well, and trying to maintain our market share with the existing customers.
Rohit Ohri
Anurag, you mentioned about utilization recovery, and we can also see that there is some recovery in the margin also. So is it because of restocking of the inventory, or is it the real demand that is coming?
Anurag Soni
See, I think we have done some work internally on planning and forecasting inventory better, so we have had a reduction in inventory now, this has again been a continuous process over the last four to six quarters. Continuously, we are ramping up capacity and reducing our finished goods, so that is then — as far as some kind of demand uptake or restocking in the market is concerned, definitely demand is better. Over the last probably six months, demand is getting better, demand is stronger than it was probably last year at similar time, so I think both are playing out together.
Rohit Ohri
Because we also noticed that some of the customer count has declined a bit, is this because of some strategic pruning from your end or the management side, or is it due to some loss of market share probably to some of the competitors or somebody?
Anurag Soni
I am not actually aware of where the customer count has gone down, if you can probably explain me better on that.
Rohit Ohri
I will take that offline, it is there in the presentation, I will take that offline, but then if you can…
Anurag Soni
Yeah, maybe you can just — yeah you can probably ask a question over the email and probably we will reply on that then, yeah.
Rohit Ohri
And in terms of the strategy mix, while we are also looking at capex, what do you think would be the strategy for man-made fiber versus the synthetic, since you have shown some good interest in green fiber as well, which is probably running at 7% [Phonetic] capacity utilization. So what is the strategy going forward?
Anurag Soni
See, as far as strategy is concerned, we would like to have more control on our raw materials and costs, so we will probably — as I mentioned earlier that both on our denim side and synthetic fabric side, we have about 50% control on the fiber side, so we will probably want to increase that, maybe take that to 75%, 80% in-house production levels. So that is something that we are working on, both polyester fiber and for denim fabric, we are working on raw materials there. And since capacity utilizations are high, so we don’t want to actually go into a new site or do a greenfield anywhere, we are looking at our existing plants where some kind of incremental capacities can be added. So we are looking at that, and energy costs — because that is our biggest cost driver, so energy costs is something that we are looking at very aggressively, that how to bring that down. So that plan is actually on the priority list, so we are doing that first, and then working on the backward integration side and then some capacity utilization. So strategy over the next six to eight quarters for capex would revolve around these points.
Rohit Ohri
Anurag, my last question before I fall back into the queue, considering your commentary which was quite strong in the beginning, and the current market scenario also, do you think that by FY ’29 we could have blended margins of more than 13% plus and have a top line of approximately INR4,500 crore or something, with ROC maybe inching towards 20% or so, by FY ’29?
Anurag Soni
Right. So I think what I can tell you is that over the next three years, FY ’29 is about I think 8 to 10 quarters is what you are talking about, so that theme will continue on the same direction, that better than before. So if we are better than before every quarter, we will probably be at numbers indicated by you, I think maybe at that level, or even better than that.
Rohit Ohri
Thanks. Thanks for answering, I will fall back in the queue, I have some more questions, I will come back.
Anurag Soni
Thank you. Thank you.
Operator
Thank you. Our next question comes from the line of Madhur Rathi from Counter Cyclical Investments. Please go ahead.
Madhur Rathi
Sir, thank you for the opportunity. Sir, I wanted to understand how has the spread for polyester fiber since — post the quality control order? And sir, our strategy to increase the captive source to 75%, 80%, how does this sit versus buying the PTA and MEG from China and processing it in-house? Considering normalized spreads of — like excluding the war situation, how should we see this segment?
Anurag Soni
See, the idea of getting a 75%, 80% control on raw material is two-front. One is obviously on the cost side, and more importantly on the quality side as well. So, we have felt that over the last six months when we made this acquisition of the polyester fiber plant, we have been able to re-engineer a lot of products, work on our bill of material costs and on the yarn side and I think that is aiding us in increasing our margins for yarn.
So, it is from that point of view, we feel that we need to have more control and more in-house production levels for fiber. So, the strategy is both on the quality and the cost front and then, see, we are actually recycling plastic waste and recycling waste is a very localized subject. So, you can’t really work on cost with importing a lot of raw materials for the polyester fiber, you have to work on localized waste that gets generated and I think that anyway is enough waste that we can collect locally in several capacities.
Madhur Rathi
Got it. Sir, I was asking more on the front of the quality control order removal on the raw materials for manufacturing this yarn. How has the spread improved post that quality control order removal? Have we been able to get better pricing for our raw materials versus what we were sourcing from Indian — IOCL or Reliance?
Anurag Soni
See, frankly, we hardly source anything from Reliance, so probably 5% of our polyester fiber actually comes from Reliance. So, it has kind of not made any kind of effect on our raw material costs.
Madhur Rathi
Right. And sir, how much would be the capex for increasing the sourcing capacity, and what would be the capex for our renewable, the 30-megawatt renewables that are in pipeline currently, and additional that you plan on adding over the next four quarters?
Anurag Soni
See, the capex in the renewable that we have already announced is roughly around INR150 crores, INR160 crores. And then there are some PPAs where we will have some equity infusions. That is another INR30 crores, INR35 crores. So, about INR200 crores is something we have already committed on the renewable side. As far as any kind of new capex or further numbers are concerned, as I mentioned earlier, we are still working on that. So, we are working on what kind of strategy we want to move forward. So, it will be a two-year cycle for the new capex that we want to plan. So, I don’t really have anything concrete to say on that today. But as and when we plan something, I will get back on that.
Madhur Rathi
Got it. Sir, just a final question from my side. How much is gross margin better for polyester yarn that is manufactured through recycled PET versus like buying raw materials from outside and manufacturing it? What would be the gross margin difference between both of these?
Anurag Soni
So, is your question regarding that if we have our own in-house fiber versus buying fiber from outside and making yarns — is that the comparison you are asking for?
Madhur Rathi
Yes, sir.
Anurag Soni
I think — see, I have not really made a comparison. I don’t have the number on top of my mind. Is it okay if I can respond on that maybe later, like if you…
Madhur Rathi
Yes. Not a problem. Thank you. Thank you so much and all the best.
Anurag Soni
Thank you.
Operator
Thank you. Next question comes from the line of Ankur Kumar from Alpha Capital. Please go ahead.
Ankur Kumar
Hello, sir. Thank you for taking my question and congrats for a great set of number. Sir, I wanted to understand, as in you said, yarn spreads are going up. So, can you comment on how much were yarn spreads in Q3 and how much in March? And how are they now? If you can please share?
Anurag Soni
No, sir. I did not say yarn spreads are going up. I did mention that due to having our own in-house control over the raw materials, we have been able to increase our margins on the yarn side. And that is why we want to have more capacity in-house for our fiber production.
Ankur Kumar
But you said, due to war, prices have gone up and are going up. So, what is the…
Anurag Soni
See, this is a very evolving situation, right? With the war, every day crude — there is a big movement on the crude oil prices. So, this is something that you have to actually not take into consideration that what the prices are today. Right? It is a dynamic scenario. And we have to probably let it settle down more and see probably a month from now, once things are under control, that actually what kind of movement has happened on the cost front, how much the price has been factored in, how much we have been able to pass it on to the customers, what kind of impact that has happened on margins.
What I would say that, as of now, if nothing changes, the way it is, we have been able to pass on a significant portion of the costs on the prices. And we do feel that the effect on the margins are minimal as of now. But it is a very dynamic scenario and we will have to keep watching how this evolves.
Ankur Kumar
But in terms of Q3 versus Q4, can you share how much was the difference?
Anurag Soni
In Q4, again, I would say that there is not a big impact of the war on the prices in Q4 itself because the war actually started end of February or the first week of March and the prices movement actually started happening from the 10th or 15th of March on the upper side. So very little impact of anything on the pricing front has happened in the last quarter.
Ankur Kumar
Got it. And sir, if crude stays somewhere near here, do we expect some gains in Q1?
Anurag Soni
See, again, I would say it is a dynamic scenario because inventory gains are one side of it. There are dyes that we use, there are chemicals that we use, there is export freight shipments, domestic freight, packaging materials costs are — so today, I think we have the strategy only is that plan for a week or plan for maximum of fortnight and see how things are moving. So very difficult to comment. And this is a very temporary and out of control kind of a scenario. Right? So we cannot really say that — anything that Q1 will be better because of this. Right? As far as operational efficiencies are concerned, our own utilizations are concerned, I can comment on that, that we are getting better. And without any external factors coming in, I think operationally we will be better. If there are some one-time gains or losses that come due to these crude prices being elevated, difficult to comment now.
Ankur Kumar
Sure, sir. Thank you, and all the best.
Anurag Soni
Right.
Operator
Thank you. Our next question comes from the line of Kamal Jeswani from U First Capital. Please go ahead.
Kamal Jeswani
Thank you for the follow-up. What is our current order book? And regarding the shipments, you just mentioned that how the freight rates have gone up or insurance rates. Are we doing FOB billing or CNF, how is it?
Anurag Soni
See, as far as the order book is concerned, across our segments and divisions, I would say that our order book is anywhere between 50 to 70 days. So we have a healthy order book that is in place. Secondly, as far as the export shipments are concerned, I think about majority — at least two-thirds or maybe even more of our exports are on FOB basis. And any new bookings that we are doing today where the freight is borne by us is actually factoring to the freight cost. So maybe some old orders, we’ll have to bear some losses on the freight, but it is again not very significant and material.
Kamal Jeswani
Okay. And second question, regarding the UK FTA, you had mentioned in the presentation, have the benefits of this started flowing to us already, or it is still in the pipeline?
Anurag Soni
I think this is still under process. We do feel that this is going to be beneficial in general for the Indian textile industry, but I think the benefits will still take time.
Kamal Jeswani
Okay. Got it. Thank you so much.
Operator
Thank you. Next question comes from the line of Vikram Duggar [Phonetic], an individual investor. Please go ahead.
Vikram Duggar
Good afternoon, and congratulations for an excellent number.
Anurag Soni
Thank you.
Vikram Duggar
Am I audible?
Anurag Soni
Yes, you are.
Vikram Duggar
Okay. Sir, I have a couple of questions. I will just quickly go through them. You were saying you are going to invest in extra capacity utilization. So where would that go? I mean, in garments, you already have a lot of capacity. So is it going to be in garments or you would probably think of value addition somewhere else?
Anurag Soni
See, again, I would say that any kind of capacity addition or new capex plans are still under discussion. I can tell you that the thing that we are working on is energy, more having our own security on raw materials. And capacity additions, we will have some kind of capacity additions planned for all the segments, except — not really garments because that we are still at 49%. So that is something that — there is room there. However, garments for our denim business or the PE fabric business, there is some kind of thoughts on that, should we try with smaller capacities and look at that? So that is still under discussion.
Apart from that, capacity additions will come across all our segments. But we are not looking at some big additions or greenfield projects. Maybe some kind of additions in our existing plants, wherever, whatever is possible. The evaluation is on. So as I have something concrete, I will come back on that.
Vikram Duggar
Sure. Sir, I have another question regarding garments. You have a lot of PLI in this government scheme, but I don’t see any other income. So you were eligible for a garment if you had incremental turnover. And since you are going for incremental turnover, do we see any kind of PLI benefit coming in the next two years? Because 2024, 2025 probably because incremental turnover was not there, that is not showing in your — I am not seeing it in the other income.
Anurag Soni
Right. See, actually, getting the benefits of the scheme that we are part of is — there are some complications there. However, see, we are not really factoring in any benefits that may flow from that front. If anything comes in, it is great. But our business model is based — like we are not really considering PLI incentives in any of our daily workings or operations. So we want to increase the utilization anyway, with or without PLI. So there will be growth there. If any kind of benefit is taken, it is great. Otherwise, there is no plan on that.
Vikram Duggar
It is like a bonus that comes in. But I am just wondering, because 2024-2025 and your incremental capacity is going up, so probably you would be eligible, right? So how much would that be? I understand it won’t come. It might or might not come but…
Anurag Soni
Right. So if anything like that comes, we will just consider it as a one-time gain, right? So let’s not really put a number to that.
Vikram Duggar
Would it be [Indecipherable] INR200 crore, INR300 crore?
Anurag Soni
No, no, no. Nothing like that. [Foreign Speech]
Vikram Duggar
Another thing that I wanted to understand is that — I went to real estate, so I saw a real estate development, Sangam India, on the Ajmer Road. In the next two years, some project of INR400 crore, you probably would have got the land. Is that in Sangam India or it is in some other promoter entity?
Anurag Soni
No, no, it has got nothing to do with Sangam India. That is a separate entity altogether. Nothing to do with this business.
Vikram Duggar
Okay, okay. Your name as Sangam India was mentioned there. So I am just wondering if there is any…
Anurag Soni
I have not seen — I don’t think Sangam India would be mentioned. Maybe Sangam — there will be something else. No, it has nothing to do with this company.
Vikram Duggar
I understand. I was just clarifying it. No problem. So I have one more this thing that your inventory is not 80 days. I mean like your inventory, you are revolving money very fast. Where do you think — is there any scope for further reduction there?
Anurag Soni
See, I think we have worked a lot on reducing our inventory on the finished goods side. The reporting normally happens with overall inventory. So we have kind of ramped up inventory on the raw material side. Finished goods inventories are, I think, at very controllable levels. So I don’t see a lot of inventory numbers going down from here. There may be some work that can be further done on the debtor side. I think our debtor numbers are still elevated in terms of number of days compared to two years ago. So that is something that would be a focus area in the coming year. So we will probably work on that number coming down. But inventory side, I don’t see a lot of downside there.
Vikram Duggar
I think I get everything. So I have just one more question. If I were to ask you between energy savings and your garment volume scale-up and your realization management, which would you think will really be the earning driver for 2027? Talking about energy.
Anurag Soni
Right. See, energy is actually just plug and play. So as and when plants get commissioned, the EBITDA starts flowing from day one. So that is something that is –you just have to say yes to the capex, right? So that is the easiest part. Everything else is something that we work for when we come to office every day. So both things are actually independent of each other. I would imagine that we would have improvements on both sides.
Vikram Duggar
Great. Thank you so much. Have a great year ahead. Thank you so much.
Anurag Soni
Thank you. Thank you.
Operator
Thank you. Our next question comes from the line of Madhur Rathi from Counter Cyclical Investments as a follow-up question. Please go ahead.
Madhur Rathi
Sir, thank you for the opportunity once again. Sir, what is the realization premium that we get on the yarns manufactured through recycled raw material?
Anurag Soni
No, I would not say that there is any kind of premium that comes on that. It is probably a-good-to-have ESG initiative on that front. So it helps you to sell better. But no, there is no premium on the pricing that you get because of that. See, again, India domestically is a price-sensitive market. So it is hard to actually imagine that you would get a premium for any ESG initiative in the domestic market. Probably there are some European markets that would pay a premium for that. But again, the volumes there are not that high as what we do domestically.
Madhur Rathi
Got it. Sir, that was from my end. Thank you so much.
Anurag Soni
Thank you.
Operator
Thank you. Our next question comes from the line of Vikas Gadak [Phonetic], an individual investor. Please go ahead.
Vikas Gadak
Hi, thanks for the opportunity. I just wanted to ask like what percent of the company’s revenue contribution comes from the cotton yarn business? And considering India is spinning one of the cheapest cotton in the world, has that contribution increased in this quarter? And have we also experienced a blend shift from polyester to cotton in overall scheme of things?
Anurag Soni
So what percentage of our revenue comes from the cotton yarn? See about 50% of our revenue comes from the yarn business. And I think we have an even mix of cotton and PV there. So I think it will be a number around 25% of the total revenue comes from the cotton yarn business. I would say that. As far as the shift between PV and cotton are concerned, they are two very distinct markets and I think both are coexisting for a long period of time. So we don’t really see it from that point of view. See, we have both products in our portfolio. And we have teams that work on selling products from both segments. So, no, I would not read too much into that shift from PV to cotton or vice versa.
Vikas Gadak
Okay. And just one last question from my end. Like, what is the cotton inventory the company is carrying? I mean what is the coverage ratio?
Anurag Soni
For raw materials?
Vikas Gadak
Yeah. I mean how much cotton inventory is company carrying?
Anurag Soni
In general, I think what we are focusing right now is that because there is an inflationary move in prices, and so we are not — across all our divisions, not just cotton, we have more coverage of raw materials than the finished goods orders in hand. So we are working on that strategy as of now. But any of these calls are probably limited to 10-15 days or maximum 30 days additional inventory in hand. So we don’t really work too much on gains from that stock for a higher number of days or taking calls on inventory because it can actually work both ways. So as of now, because of the inflationary nature of prices, across all our divisions, we are more covered on raw materials than orders of finished goods in hand.
Vikas Gadak
Okay. And how much of cotton yarn is sold in forward contracts? I mean for how many months? One last question.
Anurag Soni
There are no forward contracts. I would say that — I think the question you are trying to ask is the order book for cotton yarn. Is that…
Vikas Gadak
Right.
Anurag Soni
Right. Okay. So order book, again, I mentioned earlier that across all our segments, we have order book between 50 to 70 days. So again, cotton would be somewhere there.
Vikas Gadak
Okay. Okay. Thanks.
Anurag Soni
Thank you.
Operator
Thank you. Next question comes from the line of Avinash Nahata from Parami Financial Services. Please go ahead.
Avinash Nahata
Yeah. Hi. Am I audible?
Anurag Soni
Yes, you are.
Avinash Nahata
Okay. Can you specifically talk about, from the start of the year till the end of the year and into the new financial year, about spreads in absolute, both for synthetic as well as cotton? Cotton yarn spreads as well as for synthetic? Where we were at the start of the year? How did we end and into the new fiscal adjusted for one-time gains, if any?
Anurag Soni
So first and foremost, I think we will say that from the start of the year or till now — see, I don’t have the specific answer to your question regarding the yarn spread movement from quarter to quarter. But I would say what we have done at the company level is that from Q1 to Q4 or moving into the new financial year, across both cotton or PV side, we are working on a product mix continuously that is yielding better contribution margins in the company. We are working on our bill of material costs for all the products that we make that can we have any kind of alternate raw materials or cheaper alternatives to improve margins? We have improved our capacity utilizations, operations are more efficient across division. So I would probably talk more on that. And as far as any kind of movement in yarn spreads are concerned, one-time inventory gains, I have mentioned that earlier as well on the call that there are no one-time inventory gains in the last quarter. So the margin improvement is due to better capacity utilization and operational efficiency.
Avinash Nahata
Yeah. Directionally, I understand. But if you can talk about specific numbers on a per-kg basis.
Anurag Soni
I don’t have that handy now. I am sorry.
Avinash Nahata
[Foreign Speech] Thanks a lot and all the very best.
Anurag Soni
Thank you.
Operator
Thank you. Ladies and gentlemen, due to the time constraint, that was the last question for today. I would like to hand the conference over to Mr. Anurag Soni for the closing remarks. Thank you, and over to you, sir.
Anurag Soni
I thank everyone for joining the call today. And I hope I have been able to answer all questions to your satisfaction. Thank you again for your time. Thank you.
Operator
[Operator Closing Remarks]