Sutlej Textiles and Industries Limited (NSE: SUTLEJTEX) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Sachin Karwa — Chief Financial Officer
Ashish Kumar — Chief Executive Officer
Analysts:
Unidentified Participant
Nish Shah — Analyst
Presentation:
operator
Ladies and gentlemen, you are connected to Sutler’s Textiles and Industries Limited Earnings conference call. Please stay connected, the call will begin shortly. Ladies and gentlemen, you are connected to Sutler’s Textile and Industries Limited Earnings conference call. Please stay connected, the call will begin shortly. Thank you. Sa. Sam. Foreign. Ladies and gentlemen, good day and welcome to Q3 and nine months FY26 earnings conference call for Sutler’s Textile and Industries Limited. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand over the conference to Mr. Sachin Karwa, Chief Financial Officer. Thank you. And over to you sir.
Sachin Karwa — Chief Financial Officer
Thank you. Good morning everyone and welcome to the earning conference call of Satlas Textiles and Industries Ltd. For Q3 and nine months ended December 31, 2025. I will begin with a brief overview of the operating and financial environment followed by our performance trend for the quarter. The third quarter continued to be challenging for textile industry globally. While there has been optimism around recently announced FTAs, we believe the actual benefit will take some time to materialize as seasonal order placements were largely finalized earlier. At the same time, the industry faced persistent headwinds and elevated raw material prices, currency volatility, geopolitical developments and logistical issues, particularly in Bangladesh.
Despite these challenges, Satlaj has delivered a stable and resilient performance in Q3. We have recorded an improvement over Q2 both operationally and financially and we expect Q4 to build further on this momentum, especially in terms of profitability. On the cost side, raw material prices increased during the quarter even as demand remained relatively muted. Polyester and viscose prices, although impacted by higher crude and currency movements, remained largely stable while cotton showed a marginal decline. Our fiber business played an important role in supporting the yarn segment by providing stability and partial insulation from volatility. As a result, combined yarn and fiber margins have improved sequentially.
We have also started seeing the impact of our COP stock optimization initiatives. Employee cost rationalization and operational efficiency measures have delivered around 30 to 40% of the targeted benefits so far. With the further improvements expected over the coming quarters. These efforts are largely translating into gradual operating margin expansion. From a utilization perspective. Our fiber and home textile divisions are operating at planned levels. Yarn utilization remains stable although certain capacities continue to face margin pressure due to raw material inflation. Overall, we remain disciplined in aligning production with demand and profitability rather than chasing volume Talking about quarterly financial performance, the standalone total income came in at INR 640 crore which was lower by 2% on year on year basis.
Gross margin was at 46% which was higher by 350 basis point on year on year basis. EBITDA increased over 200% on year on year basis and stood at INR 25 crore with the margin at 4% for the quarter. PAT was reported negative 11 crores. On balance sheet position. Our balance sheet position remains under control and we continue to follow a prudent approach towards working capital and capital allocation maintenance. Capex is being incurred as planned while future growth capital will be evaluated holistically aligned with product market optimization opportunities and value added segment. With this I would now invite our whole time director and CEO Mr.
Ashish Srivastava to share the business and strategic update.
Ashish Kumar — Chief Executive Officer
Thank you Sachin and good morning everyone. Let me come direct as to where we stand. Q3 performance improved sequentially. Q4 should be better than Q3 and we are executing our strategic pivot with precision. But more importantly, what you are seeing in these quarterly results is the foundation of something larger. A transformation from a commodity textile player to an integrated platform company with clear paths to value creation. The FTA announcements have created positive sentiment and we welcome that. But we are not waiting for policy benefits to flow through. We are driving results through execution today. Let me walk you through what we have accomplished in this quarter and more critically this position us for the future.
Starting with the business performance, we have achieved three significant wins that demonstrate strategic progress, not just operational management. A market diversification. We have opened newer markets in Far east and in Africa, adding to our existing international presence. Now this isn’t just a geographic expansion for the sake of it, it’s a deliberate risk mitigation. Bangladesh, which faced severe logistical disruptions, now represents a smaller share of our export book. We have protected volumes while reducing concentration risk and frankly this was a test of whether our diversification strategy works under pressure. It does. The pipeline for additional market entries in Southeast Asia and Latin America is active and progressing.
Export volatility isn’t going away, we are clear eyed about that. But our market footprint is now structurally stronger and more resilient. Domestically we are seeing strong traction in synthetic and blended yarns which validates our strategic shift towards higher margin technical products where customer switching costs are higher than our integrated capabilities provide a genuine cooperative advantage. Now let me address the elephant in the room home textiles in the tariff question. Our revenue growth continues in this segment and here’s why we are Positioned in complex design intensive products that cannot be easily replicated or substituted. We are not competing on price in commodity segments where tariffs would hurt us.
We are competing on design capability, technical complexity and speed to market in the premium end of the market order visibility in this segment remains healthy through Q1 of next year. Yes, customers globally are managing inventories cautiously, but our order book reflects strong demand for our specific capabilities. The turnaround in this division is complete and it’s now a growth and margin accretive business, not a restructuring story. What ties all this together is our integrated model. And this is where I want to spend some time because it’s central to understanding our competitive advantage. The fiber business isn’t just sporting yarn.
It’s providing stability that standalone yarn players simply cannot replicate. When raw material volatility strikes, our internal integration absorbs shocks which that competitors must either pass through to the customers or absorb in their margins. This is precisely why our combined fiber yarn segments improved sequentially despite cotton and polyester price pressures. While yarn profitability remains under pressure from raw material inflation. The integrated model is holding and more importantly, it positions us to capture value across the entire chain as market conditions normalize. Which brings me to the bigger picture where we are taking this company. We are not just running these three separate businesses.
We are building an integrated textile platform with specific defensible capabilities that unlock adjacency opportunities and I want to be very clear about what this means in practical terms. Our platform today comprises backward integrated fiber manufacturing with polyester multi category yarn production across synthetic cotton and blended segments, design led home textile manufacturing with complex product expertise, established distribution across 15 plus countries and with diversified customer relationships and process excellence that meets global technical standards. Each of these capabilities took years to build. The question we have been asking ourselves where else can we deploy these capabilities to create value? We have identified clear paths and these are not theoretical.
We are already in pilot or evaluation stages as far as these paths are concerned. First is technical textiles and performance fabrics. Our fiber and yarn capabilities position us naturally to enter industrial textiles, automotive fabrics and protective textiles. These are higher margin specification driven segments where our technical expertise and quality systems are directly transferable. Second is sustainable and circular products. And this is where market pool is accelerating faster than we initially accept. Expected customer demand for recycled polyester, bio based fibers and traceable supply chains isn’t a nice to have anymore is becoming a requirement in several markets.
Our integrated model allows us to develop closed loop systems also giving us the flexibility of using post consumer waste where required in our fiber production and creating fully Traceable yarn to fabric solutions. We already have the recycled PET and this isn’t a CSR positioning. This is a commercial opportunity where customers will pay premium and where regulatory tailwinds in Europe and North America are creating structural, not cyclical demand. The third part is vertical integration into downstream applications. Here’s a key point I want to emphasize. These adjacencies leverage our existing platform. We are not diversifying into unrelated businesses or chasing growth for growth’s sake.
We are extending into segments we already have a competitive advantage where our capabilities are differentiated and where the economics are superior to our core business. Today, capital allocation will be disciplined. We are conscious of our targeted IRS and payback periods. Where possible, we will prioritize asset light models through partnerships and tolling arrangements. Our cost and efficiency on cost and efficiency, employee rationalization and process improvements have delivered till now roughly about 40% of our targeted annual savings. The remaining benefits will flow over the next two three quarters. But this isn’t a one time cost reduction exercise.
We are embedding continuous improvement into how we operate on utilization. We are being deliberate. We are not chasing volumes at suboptimal margins. Fiber and home textiles are at planned utilization in yarn. We are running capacities where we have pricing power and product differentiation. As our product shifts towards value added segments, utilization will increase without margin dilution. Our investment thesis is straightforward. We are transforming from commodity textile player to an integrated innovation driven platform company. Our businesses are improving sequentially. Our strategic priorities are funded and on track and our platform capabilities unlock adjacencies that create differentiated value for all stakeholders.
Customers get innovation and reliability. Employees get a growing sustainable business to build carriers in. And you, our shareholders get improving returns on more resilient higher margin business models. External headwinds are real. Raw material volatility, geographical uncertainty, currency movements are all there to stay. We are not dismissing these, but our strategic direction is clear. Execution is disciplined and we are building structural competitive advantages that compound over time. Q4 should demonstrate our continued momentum and the next year will demonstrate strategic transformation. Thank you for your support and continued trust in surplus tech SaaS. Happy to take any more questions which might come.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask 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 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of NISH Shah from Steeler amc, please proceed.
Nish Shah
Hello. Hi sir, I’m audible.
Ashish Kumar
Yeah, very much audible.
Nish Shah
Thank you for the opportunity. So my first question is on margins. The margins have improved slightly this quarter but they are not still at comfortable level. So what are the key levers which can improve margins from here?
Ashish Kumar
So I think as I address in my speech that you know basically what we are looking at, cost efficiency because that’s something which is internal markets. While we don’t have direct control over the consumer or the customer demand. But we are looking at market diversification which is a process which is on and third and the most important which is inherent to our growth is product diversification or product value upgrade. So we have seen some benefits accruing in the last quarter and we are confident that this trend is going to only continue in the coming quarters.
Nish Shah
Okay, so what margin levels are we comfortable at?
Ashish Kumar
So I think it will be right now speculative of me to kind of put in, let the Q4 set in and we all will see where we are kind of heading to. But all I can say is that I mean we are in the right direction.
Nish Shah
Okay, so just one more thing on that. So given that the margins we are will be seeing positive from Q4, let’s say the revenue and what revenue and levels do you see comfortable to see a pack turning positive.
Ashish Kumar
So I think again, you know we are right now focusing on the operating margin. Right. And what we are saying, we are not chasing volume business. So it’s more about a turnaround through internal controls and product upgrades. Now as the product upgrades happen, the top line automatically will increase. But it’s not that we are adding volumes in our non value added segment. So even at similar top line we can expect much better margins. That’s what we are chasing at this point of time.
Nish Shah
Okay sir, understood. So are we actively reducing our exposure to low margin segments?
Ashish Kumar
For sure. So I think if you have seen that. So within the three clusters, home textiles, we are in any case in the niche segment where the margins are comfortable. Fiber segment is truly supporting the growth. And as far as the yarns is concerned, it is our stated objective that in about a year’s time we want to move one third of our portfolio into value added yarns. Now obviously this will mean that our bottom line will get supported to a large extent when we clearly pivot and kind of execute this roadmap.
Nish Shah
Okay, okay. So with the Indian US trade situation evolving, what could be the potential risk or opportunities for our business?
Ashish Kumar
So I think you know, again it’s, that’s a good tailwind is what I can say now you see what happens is that even if it gets operationalizes in the next two weeks or three weeks, the real effect of this will only be seen in about two quarters because you see the placement of the orders which had to happen if you were to look at from the customer side for the spring summer has already been done. So it takes a cycle before people will want to come around and look at increasing exposure into India. But it’s a very welcome change is all I can say.
You know, it’s a welcome change. It. It brings the sentiment quite positive and it will help boost the apparel trade and the textile trade also for the country.
Nish Shah
Okay sir, understood. Sir, given the Bangladesh issue, sir, any issue leading to long term pricing pressure or do we believe that?
Ashish Kumar
I think yesterday was a big event there. We are hoping that once the results come then there is an elected government which comes into place and all discussions can only happen with an elected government. Till now it was an interim government so it was difficult to kind of get our point of view to them. So once the elected government comes in then possibly things might change and it might open bigger. It might again reset the Bangladesh India trade ties.
Nish Shah
Okay sir, got it. So given the entire global demand uncertainty and Bangladesh trade disruptions, are we seeing any demand patterns changing for a Milanian synthetic Yan Is there some change in customer preference or how is it So.
Ashish Kumar
I think you know what is happening is that obviously the lead times when it goes away. So on the synthetic side the domestic market is quite buoyant. You know, I mean it is growing. So that is where most of the thing goes. We also have in the domestic, we also have in the diet segment in the, in the synthetic side diet segment a lot of knit applications which are coming in. So a new product category is kind of emerging. So that is quite, quite a good change which is kind of happening on the melange cotton melange.
We see some trend moving from melange to Hyundai because again because of the speeds and everything else and because that was on the melange. I mean they were not wanting, they wanted to not hold larger inventories because that has been the case with most of the retailers. So there is a small change. We are also calibrating at our end as to how we can balance or make capacities fungible between our fiber dyed and a yarn dyed cotton.
Nish Shah
Okay, so last question sir, recently there was article on that center. If we purchase India purchases US cotton from us, there will be no terrorists and similar option is also given to Bangladesh. So what impact will it have?
Ashish Kumar
So I think if you see till till December last year they had opened up the cotton imports, right without duty. So it was already there. Now from after December they said that, you know, you can import the cotton now. What effect it will have will all depend on what customers are kind of looking at. Whether we also are waiting to see the fine print that you know, if we are importing the cotton, the US cotton, whether those garments are going duty free, there are certain restrictions as I, as I understand that, you know, there will be certain quotas, I mean certain quantity quotas and all which are there.
So we are waiting for the fine print to kind of come in and then only we will be. It will be prudent to kind of comment on it.
Nish Shah
Okay, sir. Okay. Thank you sir. Thank you so much for answering all the questions patiently and all the best. Thank you.
Ashish Kumar
So no problems. Thank you Nishi.
operator
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one now. I repeat, to ask a question, please press star and one this time. The next question is from the line of Shankar Raja, an individual investor. Please proceed.
Unidentified Participant
Hello, I’m audible.
Ashish Kumar
Yeah, Shankar, you’re very much audible.
Unidentified Participant
Thank you sir. Thanks for this opportunity. My questions are focused on home textile segment of our. Sir, what is the strategy in this segment? Are we focusing more on growing the volumes aggressively or is the focus more on improving the margins and sending the product?
Ashish Kumar
No, I think what we had very clearly, I mean in my introductory comments what I have said is that our home textile business is one thing which in spite of the increase in tariffs, did not face any headwinds. That was purely because we are positioned in a design intensive production which cannot be easily substituted. Supply chains cannot move. So we continue to work on this strategy on focusing on more value added pieces in the home textiles and we are looking at a market diversification. So you know, while we are doing reasonably okay in the US market in the segments, there are enough opportunities which are presenting themselves in different other geographies.
The other thing which we are looking at in the home textiles, we have incubated the whole made up story there and that has contributed to some revenue in this year. We are going to build the made ups, as I said. How do you go from midstream to a little bit of further midstream, not really the downstream where you not only do just the substrate, which is the fabrics, but also provide the products, whether it is something like a bed in a box or something like the kitchen over the table piece that’s something which we are evaluating.
So to answer your question straight, we are looking at operating in the value added segment and continue to grow that particular piece.
Unidentified Participant
Okay, sir, thank you. Another thing was on order book, you did mention we have order book visibility till Q1 in your opening remarks. Would you like to quantify that in some context or could give you. Could you just say whether it’s a strong order book or something? No.
Ashish Kumar
So I think it’s when I say the Q1, so I mean ideally it’s not a because that only means that I mean these are, you know, the whole entire home textile business. Part of it is the catalog business, part of it is the, you know, which goes into the US market or the Europe market. When I say the order book is there is a visibility of F1, FY Q1, which means I have a reasonably long order book which is close to about 120 days. Now that may also force us to relook at debottlenecking some of our capacities so that we can really take advantage and build our volumes also in this segment.
So it’s a good process problem to have. We are trying to see how to, you know, kind of streamline this entire piece.
Unidentified Participant
Okay, thank you for that. So this answers my near term visibility, but what about the long term visibility of this segment? So do you think this segment could be a, you know, meaningful profit contributor in the long term of say over the next two years or three years or.
Ashish Kumar
For sure, I think so. What. So what we. So sorry. Yeah, continue. I mean complete the question.
Unidentified Participant
I just want to say will this be a meaningful quant. Prof. Contributor or will yarn be our core focus of the business?
Ashish Kumar
Like how so at this point of time this is just about. The home textile piece is just about 5 to 7 to 8%. We want to build it to 20% of our total volume or total top line.
Unidentified Participant
Okay.
Ashish Kumar
So we are going to double the business in home textiles.
Unidentified Participant
Okay. So with that team in our domestic markets, I can see our, you know, total stores in this segment around 480. So are we thinking to add more stores?
Ashish Kumar
So I think our domestic strategy is slightly different. We are going to focus more on modern trade and more on OEMs as we would call it. And also, you know, kind of grow our brand which is homegrown brand called Nestera. So these are the things which are where we are focusing on and growing on.
Unidentified Participant
Okay. And one last thing, apart from the top three states that’s mentioned are PPT that Maharashtra, Gujarat and Delhi, are there any Upcoming states that you would want to focus on.
Ashish Kumar
Sure, we are focusing. We are looking at the south region very, very closely and trying to see what is the best way to expand our footprint there.
Unidentified Participant
Okay, sir, thank you. Thank you so much for this opportunity. I’ll join back. Thank you for having us and all the wish for your future. Thank you.
Ashish Kumar
Thank you so much, Shankar.
operator
Thank you. The next question is from the line of Raj Doshi, an individual investor. Please proceed.
Unidentified Participant
Hello. Thank you for the opportunity. Am I audible?
Ashish Kumar
Yeah, Raj, you’re audible. Please go ahead.
Unidentified Participant
So you have mentioned about the value added products. So can you know what is the current mix of value added product and how do we, how do we expect it to ship meaningfully in your future?
Ashish Kumar
So I think as I said that I did mention that we would like to have at least one third of our products, you know, in the value added segment. When I say the application segment, you see the yarns, what we do, they go in for various applications. They go in for apparel, knit or woven. They go in for industrial applications. They go in for the technical textiles, basically the FR piece which is there. And in the automotive segment. So what we would want are. So this is from the application lenses, right? From the fiber lenses.
What I mean is that how do we move up from the basic cotton polyester viscose to either circular or post consumer cotton recycled polyester or other fibers like aramids or sustainable alternative fibers which should form part of our portfolio. We are already engaged in almost all of them. We just have to build volumes in the this.
Unidentified Participant
Okay sir. And how different are margins in value added yarn compared to the regular yarn?
Ashish Kumar
So it all. So I think definitely the, the, the. So if you look at the basic raw cotton, right, the raw cotton yarn, I mean the gray yarn which we, which kind of goes in the value addition. I can only give you the spectrum, you know, I mean that’s where the, the whole piece on valuation is the lowest and it requires continuous investments, reduction of the power cost and then on the extreme end. So I will, I mean if I were to say that, you know, I mean a fiber, a cotton fiber maybe let’s say is a $1.50 per kilogram the fiber itself.
And let us say the Aramid which is there or the Kevlar which is there is like a $40. So that’s the spectrum. Now obviously when you look at somewhere in between or where you kind of come into sustainable hemp is somewhere around $5. There is flax, which is there. There’s banana fiber which is there, there’s recycled cotton which obviously gets your premium. So it’s the whole straddle which is there. And as you go up the fiber chain, there’s obviously a little better value which you can capture in the entire process.
Unidentified Participant
Okay, okay, sure. But there is no any margin range which you could provide right now.
Ashish Kumar
So again, it all depends because you know, they are challenges. But definitely the margins are. I mean if I were to say that There is a 1x margin in the basic cotton, you could go up to at least 2.5 times in, in the specialty products.
Unidentified Participant
Okay, sure. And also related to cotton prices now like there are, there were price increases in cotton. So how, how did that impact like domestic prices were higher than the global level. So how did, did it impact our exports?
Ashish Kumar
So you know, again, if you look at primarily so overall it surely impacted for the country. But if you look at from the Satvaj point of view, in our total portfolio, cotton per se is roughly about 42, 42%. And the balance is more the synthetics play which we have. And even in the synthetics the prices have kind of gone up over a period of time. So in cotton the price which was 51,52,000 has gone up to 55,000 in the range what we operate upon. So yes, it did have an effect, but lot of it because in the, in the basic cotton the pricing gets normally when there is a cotton increase gets passed on to the market.
Unidentified Participant
Okay, okay, sure. So that answers my question. If I have anything, I will fall back in queue and thank you and all the best.
Ashish Kumar
Yeah, thank you Raj. Thank you.
Unidentified Participant
Thank you. The next question is from the line of Deepak Karva, an individual investor. Please proceed.
Unidentified Participant
Hello. I’m audible.
Ashish Kumar
Hi Deepak. You’re audible.
Unidentified Participant
Okay. So my question is regarding the global conditions, like global scenario in like what gives you confidence that money can improve? Looking about the global condition uncertainty. Is it like cost reduction, better product mix or renewable source or something else? So I think, you know,
Unidentified Participant
I mean if we were to look at the global uncertainty, I think that is there to stay, you know, I mean it’s not something now it is, that’s an event, you know, and you, you give strength to the event by the way you react to it or respond to it.
So what we are saying is that in a way it is a good wake up call for India. I mean whatever the tariffs which kind of came into India because we were highly indexed, almost 33% of our total exports of the textiles was indexed into out of the 33 $35 billion, which we do, almost 10 to 12 billion dollars was us. And obviously the US do offer the comfort of the larger volumes and continuous orders. But I think what it did to the community and I think if you were to look back five years from now and see it’s a wake up call because people have started looking at what are the options and evaluating how to de risk geographies even from a supply point of view.
So A newer geographies will open up, B, see the cost efficiency and the process efficiency has to be there. That has become a hygiene, you know, I mean you can’t, you know, you can’t compete with a new age vehicle in the old construct, so to say. So you will have to kind of invest there continuously. If you have to remain in this entire business, you have to manage your energy cost as you kind of move forward on that. The value addition gives you the edge as we have seen that if you are into a segment where your stickiness is higher with the customer, it is difficult for the customer also to move away from you in spite of everything what happens.
So that I would say value added product, more integrated supply chain to the customer, supply chain gives you the added advantage. Cost processes are the hygiene which you need to keep in. And risk diversification is something which you need to be consciously working upon on different markets. So how do you diversify?
Unidentified Participant
Okay, so like global environment, what we are focusing more on, like protecting our margin, like even a volume slowdown, or we are prioritizing ours to maintain capacity utilization.
Ashish Kumar
So I think it’s a combination of both. It’s not like a single strategy. One is obviously we are looking at diversifying the marketplace, which we have done a little bit.
We have opened up three more markets in the last quarter. And that’s a deliberate attempt which has been done from our end. Now when you enter into a new market, obviously you need to have a market strategy. You may not necessarily command the premium because the customers will want to test you. And then once they test, once they know, once they understand the English you speak, you understand the English they speak, then possibly the relationship kind of grows. So initially maybe the margins are little challenged because you want to build the market. And then slowly, once you kind of establish the proof of concept, then the relationship becomes a little more mature and you can talk about a more long term stable relationship with sustained margins with these customers.
So what we are doing is diversifying the markets. We are also diversifying our product segment. So initially what was limited to only apparel segment, we are deliberately Moving into automotive industrial yarn segments, the FR segments so that are there again once while the cycles are little longer. Because it’s, it’s a process of compliance and certification. But once you are done and once you are, once they are sure of your quality, the stickiness increases.
Unidentified Participant
Okay. Like is it right to say that current margin pressure is due to external factor or is like something else?
Ashish Kumar
So you know any crisis and opportunity is what we, what we believe that. You know. And I think obviously what you can’t control is the external environment but what you can control is the internal environment. Right? I mean, you know, so obviously cost efficiencies, internally, whatever can be done and never ever it is a single factor which affects your entire margin. So it’s a combination of both. What we are doing at our end is as I said looking at our process efficiency which can give us a margin or two.
Whether it is the people cost or whether it is a non value added, non essential segment getting automated or through a value addition which we provide to our customers a value added product. So it’s a combination of both.
Unidentified Participant
Understood sir. Thank you for answering my questions. Sure. Thank you.
Ashish Kumar
Thank you Deepak.
operator
Thank you. The next question is from the line of Hari Kumar, an individual investor. Please proceed.
Unidentified Participant
Good morning sir. Am I audible, sir?
Ashish Kumar
Yes Harry, you are very much audible. Thank you for.
Ashish Kumar
Okay. Thank you for taking the question. Sir. The first one is regarding our capacity utilizations. Like what percentage they are and related to that our quarterly run rate it was almost reaching thousand crores. Now we are back to 650. Is it due to low capacity utilization or pricing has gone down?
Ashish Kumar
So I think you know what we have done is. No. Our capacity utilization is roughly about 94% at this point of time. Now see when the fiber, when the cotton was 100,000 obviously it’s a direct pass out to the market at that point of time possibly our quarterly turnovers were in the range of about 900 to 1000 crores. Now the cotton prices obviously got readjusted to the current of 52, 53,000. So I think we have been operating in the last four last eight quarters in let’s say 700 to 600 kind of per quarter revenue rate.
And we are maintaining that as we. And as I said, you know, I mean it is a question of not chasing purely the top line. It is also about ensuring how the bottom line is kind of built upon in near time. That’s the whole focus.
Unidentified Participant
The second question sir, regarding this raw material conversion like after this removal of import duty and Cotton as it turns favorable, sir. Ramitism to product conversion different. No.
Ashish Kumar
So I think again it is what use it is going. See the knit industry, the cotton knit yarn, which it goes. It is always under pressure, right? I mean, if you just compare between India and Bangladesh, you know, I mean India, the Bangladesh yarns are at least 30% cheaper if they produce, 30% more expensive if they have to produce it locally. And that has been their grievance over a period of time. So stabilized cotton prices bring in stability in the yarn prices over a period of time. But if you look at the India prices, India cotton prices that has at least gone up by around 7,8% in the last six months.
What worries and what is more troublesome for the industry is the volatility in the cotton pricing. You know, if it is volatile, one day it goes up by 2000, other days it comes down by 2000. That swing is what makes. Because you know, you nobody buys the cotton for the entire season in one go, right? So one has to kind of build positions as they go around. So volatility hits. But the price for now has been stable. So whether it is your question was whether it has effectively it the conversion cost, not the conversion cost.
I think the increase in cotton prices if you are in the. In the basic yarns normally gets passed on. There is a lag for sure between the cotton price increase and the yarn price increase. But it has to kind of get passed on.
Unidentified Participant
And lastly, sir, we are in a few companies to have a traceability. Like we are totally integrated. Like are we not getting the same pricing advantage, sir?
Ashish Kumar
So I think you see Europe especially. Yes, yes. I think we are building it up because I think that’s what I said that we have all the components. It’s about just putting it together and ensuring that we tap into the right markets who value this. Once the EU FTA comes into place, this is going to be one of the realities which will hit the textile players in India. You know how ready they are, you know, whether it is the cbam, whether it is the eprs or they will want the traceability. And we are, I mean, not because that they want, but because we believe in it.
We are making ourselves ready. So that it’s not about just saying that we do this, how do we demonstrate it? So, you know, that is the piece which is being worked upon at this.
Unidentified Participant
Point of time that is showing future profits for sure.
Ashish Kumar
I think, you know, I mean, if you see it does not the ESG scores are or sdg. I mean whatever has Been spoken about. It is not only from from the customer side, even from the financial institution side. They are offering concessional capital access to companies which adhere to their SDGs or you know, which are there to committed to reducing their footprints, carbon footprints and this has even come to India.
Unidentified Participant
Thank you. Thank you very much for that.
Ashish Kumar
Thank you Deepak.
operator
Thank you. The next question is from the line of Deep Doshi, an individual investor. Please proceed.
Unidentified Participant
Yes, hi, can I go ahead please?
Ashish Kumar
Hi Deep. Please go ahead.
Unidentified Participant
Okay, so with reference to the slide 5 of the investor presentation, the yarn business which is there so in Q3FY26 when it comes to EBIT you have made 1 crore in that business. So just wanted to know like the yarn business contributes majority of the revenue but the margins have remained under pressure. So what are you doing over here when it comes to the product mix or customer segments that can help the profits over here?
Ashish Kumar
So two things. I mean I think I did cover it initially but I think specifically for the yarn business two things which we are doing. One is working internally as to how we can reduce our costs and there are two or three very clear levers on that. One is how do we reduce our energy cost because energy cost is roughly about 40% in the yarn conversion and the states in which we operate have one of the highest tariffs, whether it is Rajasthan or whether it is what is in public domain is what I can share that we have, we have already kind of tied up with for renewable energy and that benefit should start accruing in from quarter one of next year.
That is number one. Number two is on the cost of people. You know, I mean there we had initiated certain changes. We have kind of converted the three units into two fulfillment centers and we expect at least, I mean at least 150 basis points reduction in our manpower cost as we kind of move forward.
Unidentified Participant
Okay, so got it. That was like really helpful.
Ashish Kumar
Yeah, so that’s the internal point of view. From the external side they are obviously all that product play geography de risking. How do we optimize more of capacity which became under pressure because of Bangladesh road transport coming to a halt. That’s the go to market strategy. So we are working on both sides to see how we can best uplift the sentiment in the Yang business.
Unidentified Participant
Okay, got it. So can I expect some better profitability from Q4 onwards itself or should I wait for some couple of quarters more?
Ashish Kumar
So I think the so well you what we are seeing is there is an upward trend and this trend will continue. Now obviously it is dependent on I mean, in spite of the external conditions we have, we have kind of made these positive turnarounds. So they will only get better as quarter on quarter. So it’s not that, I will say that it’s not a hockey stick projection that, you know, I mean, it will, right now it will dip for few quarters and then it will come up. You will see improvement quarter on quarter. The real benefit of it, possibly, we’ll kind of realize in about two or three quarters from now.
Unidentified Participant
Okay, sir, thank you. That was useful. And just a couple of questions, more if I can go ahead, please.
Ashish Kumar
Yes, please.
Unidentified Participant
Okay, so I’m just coming to the market scenario. So I think that the industry is gradually shifting towards synthetic and blended yarns. Right. So how are we positioned to benefit from this? And are there any plans of capacity expansion or what’s our strategy? Are we focusing more on the specialty and side of things?
Ashish Kumar
So I think when you say, what you mean is actually the industry is pivoting more towards the activewear segment or the, you know, now in the synthetic, they are obviously different segments. One is the suiting segment, which is the poly viscose suiting, which goes into more of the formal wear, the polyester viscose knits which forms a part of activewear segment. And then they are, you know, then they are players of fiber, which are microdenier, which gives you different, different yarn. And also, as far as spun yarn is concerned, if you are talking about the filament yarn, currently we don’t have any plan to get into that filament yarn within the sponge segment, whatever plays are possible, we are experimenting and we are hopeful that, you know, we will be able to.
The capacities which we have are good enough to capture the value which the market has to offer.
Unidentified Participant
Okay, got it. And this punch segment, what you are referring to, how is the response from the client side? Like, are we getting a positive feedback from them?
Ashish Kumar
So it’s building up, you see? You see, it’s a cycle, you know, I mean, you, you test you and then the whole cycle. But there is a positive sentiment on that is all I can say.
Unidentified Participant
Okay, so got it. So can I just take one last, last question when it comes to home textile business, please?
Ashish Kumar
Yes, please.
Unidentified Participant
Thank you, sir. So just wanted to know more about the competitive scenario in the market currently. So are we facing any pricing pressure from countries like Bangladesh, Vietnam or Turkey? I think you highlighted something about Bangladesh in the past. But can you just tell me more about the competitive intensity right now and how are we trying to like, face this and this wanted an outlook about this as well.
Ashish Kumar
So. Okay, so I’ll give you a general outlook and then I’ll talk specifically about Satlit. You see, the home textiles has a varied spectrum. There is this whole over the bed segment which is the bed sheets and everything which kind of goes around. Then there is this whole upholstery segment which is more to do with the furniture, the curtains and then over the table kind of segment which is there. Now the value chains in all of these three are quite different and intrinsic and it’s not. So Bangladesh for sure is not a competitive competition as far as the home textiles is concerned because again they don’t have, I mean they are more onto the fashion apparel side, you know, which they kind of work upon the competition on.
This is let’s say more from China and more from Turkey because that’s where things kind of work out. And also from Pakistan on the basic sheeting which are more of polyester cotton. India has an inherent advantage of the cotton supply chain and that’s one of the biggest advantage. Almost 23% of the world cotton is in India is what we produce. So because of that inherent advantage which India has, the supply chains are not easily replicable. You know, I mean while. And then coming specifically to Satlaj, we operate in the value added design, complex technical expertise required kind of a segment where we have made our production facilities a little more modular to offer to our customers more value added services like just in time or we work with them on a TCO basis which is total cost of ownership basis.
So that segment remained protected even when the tariffs were 50%. Which only goes to prove that there is reasonable price elasticity which we can kind of dig in as we kind of move forward. So we will continue to operate in that segment and we will only move a little bit of downstream there by offering a full bag in a bed, bed in a bag solution or over the table. Products to the market to the customer, which we have.
Unidentified Participant
Okay, so I got it and this was really helpful. And anything about Turkey, I think you covered Bangladesh and Vietnam. Anything specific about Turkey? As an investor I should know? No.
Ashish Kumar
So Turkey obviously has an inherent advantage because it is closer to Europe. Most of the brands are looking at on time supplies. So in spite of whatever cost if, if they were to view it. So Turkey remains a country which is not again easily replaceable.
Unidentified Participant
Got it sir. Thank you. This was really helpful. Best of luck for the coming quarters.
Ashish Kumar
Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand over the conference to management for closing comments. Over to you, sir.
Ashish Kumar
Thank you everyone for your continued support in Satlis Textiles. If there are any further questions, you can reach out to us through our advisors and we’ll be happy to engage. Thank you. Once again.
operator
Thank you. On behalf of Satluj Textiles and Industries Ltd. That concludes this conference. Thank you for joining us. And you may not disconnect your lines. Thank you.