Sutlej Textiles and Industries Limited (NSE: SUTLEJTEX, BSE: 532782) reported a sequential improvement in operating performance in the December quarter even as demand across yarn and home textiles remained muted, according to the company’s Q3 & 9M FY26 investor presentation released on Feb. 12, 2026.
Q3 FY26 operating performance
Total income in Q3 FY26 stood at ₹640 crore, broadly flat sequentially and down 1.9% year on year. EBITDA improved to ₹25 crore from ₹17 crore in Q2 FY26, with EBITDA margin expanding to 4.0% from 2.7% in the previous quarter. The company reported a net loss of ₹11 crore, narrowing from a loss of ₹18 crore in Q2 FY26 and ₹24 crore in Q3 FY25.
Management said the quarter marked a step forward from Q2 as operating conditions stabilized, though global uncertainties and input cost pressures continued to weigh on the sector. The company highlighted improving trade prospects from free trade agreements with the UK and the European Union, which could support export-oriented textile demand in coming quarters.
Nine-month FY26 snapshot
For the nine months ended Dec. 31, 2025, total income declined 5.3% year on year to ₹1,885 crore. EBITDA stood at ₹48 crore, compared with ₹51 crore in 9M FY25, with the EBITDA margin at 2.5%. Net loss for 9M FY26 was ₹55 crore, broadly in line with the prior-year period. The company maintained debt-to-equity below 1x, with low utilization of working capital limits, supporting balance-sheet stability.
Yarn business trends
The yarn segment revenue declined to ₹591 crore in Q3 FY26 from ₹597 crore in Q2 FY26 and ₹609 crore in Q3 FY25. Sales volumes eased to 24,973 tonnes, with capacity utilization at 86%, down from 90% a year earlier. Segment EBIT remained under pressure, reflecting weaker pricing and demand in export markets. For 9M FY26, yarn revenue stood at ₹1,750 crore, with volumes of 72,888 tonnes and utilization of 84%.
Home textiles performance
The home textiles segment posted Q3 FY26 revenue of ₹45 crore, broadly flat sequentially, while segment EBIT remained negative at ₹7 crore. The company said its Nesterra brand continued to gain traction across domestic and export channels, supported by distribution expansion, product launches and brand activation initiatives. Total active Nesterra stores stood at 480, with strong presence in Maharashtra, Gujarat and Delhi.
Sustainability and product mix
Sutlej continues to expand its sustainable green fibre platform, with 120 tonnes per day of installed recycled polyester staple fibre capacity, operating near full utilization and servicing about 73% of in-house green fibre demand. The company highlighted the role of backward integration in improving operating efficiency and lowering raw material dependence.
In specialty yarns, Sutlej operates over 4.13 lakh spindles, with a diversified mix across melange and blended yarns and exports to 60+ countries, providing resilience through customer and geographic diversification.
Outlook
Management said the operating environment is stabilizing, with early signs of demand normalization. The company expects trade agreements with key markets to improve access for Indian textile exporters. Near-term caution remains due to input cost volatility and global macro uncertainty, but Sutlej aims to improve margins through efficiency measures, higher value-added yarns and sustainability-led differentiation.
Summary
Sutlej Textiles reported a sequential improvement in Q3 FY26 EBITDA and a narrowing of losses as operating conditions stabilized. Yarn volumes softened and home textiles profitability remained under pressure. Balance-sheet leverage remained conservative. Management expects structural tailwinds from trade agreements and a gradual recovery in export demand to support operating momentum over the coming quarters.