Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Sutlej Textiles and Industries Limited (NSE: SUTLEJTEX) Q4 2026 Earnings Call dated May. 06, 2026
Corporate Participants:
Sachin Karwa — Chief Financial Officer
Ashish Srivastava — Chief Executive Officer
Analysts:
Amit Agarwal — Analyst
Unidentified Participant
Unidentified Participant
Presentation:
Operator
Sarah Good day and welcome to the Q4 and FY26 earnings conference call for Suplex Textiles and Industries Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Sachin Karwa, Chief Financial Officer. Thank you and over to you sir.
Sachin Karwa — Chief Financial Officer
Good morning everyone and welcome to the earning conference call of Satlaj Textile and Industries Limited for Q4 and the full year ended 31 March 2026. I will begin with a brief overview of operation and financial environment followed by our performance for the quarter and the year. The fourth quarter was played out against an exceptionally challenging global backdrop. FY26 was a year marked by significant micro headwinds. We navigated through the impact of India, Pakistan situation, geopolitical tensions in Middle east, destruction arising from US Iran development and the ongoing effects of global Bangladesh trade situations.
These are not routine volatilities. These are the kind of events that test the resilience of any business. Despite all of this, I am pleased to report that Q4 has been the best quarter of the year both operationally and financially. These numbers reflect the hard work and structural changes we have embedded into our business over the past quarters. On the cost side, employee rationalization and operational cost management have contributed meaningfully to margin improvement. From a utilization perspective, our yarn division is operating at over 93%.
Fiber and home textile continue at planned levels. We remain focused on running those capacities where we have pricing power and product differentiation rather than chasing volumes at suboptimal returns. Talking about the quarterly financial performance, the standalone total income came at rupees 699 crore which was higher by 4% on year on year basis. Gross margin was at 45% which was higher by 329 basis point on year on year basis. EBITDA increased over 115% on year on year basis and stood at 37 crore with a margin at 5.3% for the quarter.
For the full year, FY26 standalone income came at rupees 25. 85 crore which was lower by 3% on year on year basis. Gross margin was at 45% which was higher by 2303 basis points on year on year basis. EBITDA increased by over 25% on year on year basis and stood at Rs. 85 crore with a margin at 3.3% for the year. This year our home textile business has turned positive. Our debt position is within our comfort zone. With this I would now invite our whole time director and CEO Mr. Ashish Srivastava to share business and strategic updates.
Ashish Srivastava — Chief Executive Officer
Thank you Sachin and good morning everyone. Before we come to our performance, let me set the backdrop. Context matters in interpreting these numbers. FY26 has been one of the most demanding years the global textile industry has faced in recent memory. The world has navigated a sequence of overlapping shocks. The India, Pakistan situation, escalating tensions across the Middle east, the us, Iran developments, the continuing fallout from Bangladesh, sharp currency movements and a tariff environment that has reshaped cross border textile economics almost in real time.
Raw materials market have remained persistently volatile and global apparel demand has stayed soft as customers run the inventory site. Several textile players have reported margin compression, capacity rationalization and inventory write downs. India in my opinion however, sits in a relatively favored position within this dislocation. China plus one continues to play out. The India UK FTA is being operationalized, the India EU agreement is progressing and the NTTM PLI framework PM Mitra Parks Provide Structural Tailwinds the opportunity for Indian textile companies positioned right on product mix markets and cost structure has rarely been clearer against that backdrop.
Let me come directly to where we stand. Q4 as detailed by my colleague Sachin was one of our best quarters of the year. The full year was cash positive. EBITDA grew 25% year on year on a whole year where revenue contracted by 3% and EBITDA margins expanded fourfold within the 12 months from 0.8% in Q1 to 5.3% in Q4. That combination market margin expansion through a softer top line year in an environment we have just described is the most important number on this call. It tells you the strategic pivot is working and it is working through design, not luck.
Last quarter we said Q4 would be better than Q3. It is now. Let me tell you why this trajectory will continue. Three strategic levers are driving the performance. First, market diversification, which is now structural not aspirational. We have opened newer markets, markets like Egypt and Far east geographies in wake of Bangladesh, Africa and Latin America are showing healthy traction and our Southeast Asia pipeline continues to develop. Concentration risk today is meaningfully lower than it was a year back.
The India UK FTA and the progress on India EU negotiations will open up structural new corridors for our value added yarn and home textile portfolio. We are not waiting for those benefits. We are positioning to capture them as they flow through second product upgrade. Here also we have been moving systematically from commodity to market driven. The Objective stands roughly 1/3 of a yarn portfolio into converting 1/3 of our yarn portfolio into value added segments over the next 12 months. And the contribution margin uplift is already visible in numbers.
On the fiber side, surplus green fiber, our recycled polyester and sustainable alternative fiber business has had a breakout year. Operating at over 100% utilization. It is a high quality ESG aligned platform with structural demand from global brands seeking traceable recycled content fiber and one of our most strategic long term value drivers. Third, and this is where we want to spend a little more time because this is what sets up our next phase of growth. Our new value drivers, the first one being home textiles.
I think from turnaround to growth engine, that’s what we are aiming it to be. This was a restructuring story last year. It is not a restructuring story anymore. The order pipeline today sits at 180 days. The strongest visibility we have ever had and that has come despite global headwinds. The division swung from a negative 3.5 crore to a positive 8.4 crore at the EBITDA level in the last financial year. And our retail brand Mistera is scaling with sustained momentum. We expect home textiles to grow meaningfully faster than our conventional business.
And we are positioned where it matters in design intensive technically complex products that cannot be substituted on price alone. Next is the platform extension into technical textiles. We continue to extend the platform into adjacencies where our fiber, yarn and process capabilities are directly transferable into higher margin specification driven categories. The next step in this direction is a calibrated entry into technical textiles, a high growth performance engineered vertical. Beginning with protective textiles.
This is one of the fastest growing subsegments globally driven by tightening safety regulations and rising defense modernization. The entry strategy is deliberately capital efficient. We will leverage existing manufacturing assets and integrated infrastructure supplemented by incremental capex aligned to specific market and product opportunities. We will share more as the initiative reaches the milestones at which some substantive update is meaningful. Last but not the least, I think SATLAJ has published its inaugural sustainability report for five Stone.
This is what I call is a good milestone for our stakeholders. This is not a compliance document. It is a structured articulation of how we intend to run this business over the next decade across climate action circularity, water and energy stewardship, social impact and governance. The report establishes our baseline, sets our commitments, sets our commitments and benchmarks us against the leading peers in our industry. Why this matters commercially because global brands and large institutional buyers now select suppliers on traceability, recycle content and credible ESG disclosure.
These are no longer nice to haves, they are increasingly preconditions to win businesses and in the markets we want to grow into. Our integrated fiber to yarn to fabric platform combined with satvaj Green fiber proposition positions us strongly here and the Sustainability Report formalizes this positioning. It will shape how capital capacity and product development decisions get made in this company going forward. On FY27 we want to give you a sense of direction rather than specific numbers. The year is yet to play out and we would rather come back to you with each quarter’s evidence.
FY27 is a year we expect the company to cross the inflection point from margin recovery story to profitable growing deleveraging businesses. We expect EBITDA to expand meaningfully on the FY26 base, profitability to return after almost two years of losses and debt metrics to improve materially as cash generation strengthens. The drivers are in place. Yarn margin expansion to product mix, home textile scaling on a strong order book, sutlaj green fiber revamping further and continued discipline on cost and capital allocation.
Our planned CapEx for the year is calibrated and milestone based with every investment measured against payback, roce and strategic fit. We are not chasing growth for the sake of growth. On yarn, the focus remains unchanged. Preserve and expand margin through product upgrades, not chase volume in low margin segments. On sustainability, having formalized our framework through the FY25 report, the next phase is execution recycled cotton expansion, renewable capacity scale up water and waste targets and integration of circular materials into our portfolio.
This will be our competitive moat, not a compliance requirement. Three calls we can take from this call which we want you to take from this call. 1. FY26 demonstrated that margin LED model works. EBITDA being up by 25% on a softer top line is a proof point. The strategic pivot is no longer a thesis, it is a result. Number two FY27 will be a year of inflection. Direction of travel is profitability, EBITDA expansion and a clear deleveraging trajectory. We will let each quarter speak for itself. Third, beyond the financials, the foundations of a Longer term equity story are being put in place.
Suffolk Green Fiber is scaling home. Textiles is growing engine. Our inaugural sustainability report formalizes the platform we are building and we continue to extend that platform, beginning with technical textiles into higher margin innovation led categories. That is the direction which the company is being reshaped. We are equally conscious of the watch areas. Forex, hedging discipline, global tariff uncertainty and borrowing cost management. None are being deferred. Each is being actively addressed.
External headwinds are real and we are not dismissing them. But our strategic direction is clear. Our execution is disciplined and the structural advantages we are building will compound over time. Q4 has demonstrated continued momentum. FY27 will demonstrate strategic transformation. Thank you for your continued trust and support in Southwest Textiles. We will now open the floor for questions. Thank you.
Operator
Thank you very much. We will now begin with the question and answer session. Anyone from wishes to ask a question may press Star and one on the attached 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. Participants, you may press Star and one to ask a question. Participants, you may press Star and one to ask the question.
The first question is from the line of Amit Agarwal from Leeway Investments. Please go ahead.
Questions and Answers:
Amit Agarwal
Hello, good morning everyone. My first question is that there have been news reports coming in that yarn prices have gone up since March. So can you give how much percentage, throw some light on what percentage has the yarn prices increased compared to March and how much bottom line will increase because of this yarn prices improvement?
Ashish Srivastava
Good morning, Amit. Thank you for the question. I think the increase in yarn prices is commensurate to the increase in the raw material prices. I mean, if you look at how the raw material price index is moving with polyester moving almost by about 30%. Viscose, acrylic, cotton, all of them are on an upward trajectory. So at best what is happening at this point of time is the increase in yarn prices is a direct result of the raw material price increase which is currently getting passed on to the market.
Market. So to say. So what I would say is that there’s no, I mean there’s no incremental contribution which is coming to the spinners, but their margins are being protected at this point of time.
Amit Agarwal
But do you think that it will improve the bottom line? Because ultimately we are concerned about the bottom line which has been negative last two years.
Ashish Srivastava
That is, that is true. And As I explained that, you know, I mean, I mean our efforts, if you look at the. We have very clearly spoken about how the journey we have taken and how quarter on quarter we have improved. And as I said that, you know, for FY27 that will be the year where the real transformation benefits will the company will realize.
Amit Agarwal
And my second question is regarding the Nestera brand. Sir. Usually when the brand is launched because it’s a new product, the growth per annum should be more than 20 or 30% because it’s a new product and there’s a huge market in India as well as abroad. But in last four or six quarter our top line has been stagnant a bit. Could you throw some light on that?
Ashish Srivastava
Sure. So I think the strategy for our Nestera brand is a very calibrated one. We are moving on a very, I mean working capital efficient model. It’s not necessarily a complete retail story. We don’t, we still have not gone into any franchise model or have opened our own stores. I mean it’s basically we are playing on our design strength and offering to the Indian market and working with LFSS, I mean large format stores or the MBOs. And that’s how the strategy will remain. We don’t want to, you know, really stock up our inventory by going directly into the retail segment.
As of now, as the home textile businesses, as the home textile business grows, we will have a little more, let’s say float to play around with this brand on Nestera and build it accordingly. But it’s exactly going as per what our plans are. So I do understand that the brand can become bigger but owing to the plan which we have put into action, this is in line with that.
Amit Agarwal
And my last question is regarding the inventory losses. So usually the inventory losses happen when the prices are crashes, prices are going down. But for last six months the prices are going on the upside. So how come this inventory losses are there and do we expect any further inventory losses that has to be booked in this present year.
Ashish Srivastava
So let me just qualify this. We don’t have any inventory losses as far as India operations are concerned. If you go a little deep, we had acquired a subsidiary in US called American Silk Mills. That operation we have kind of decided to close down or mute it down. So the losses on the inventory side is primarily coming from, from our holding in the subsidiary which is in US and not our India operations. Hope this clarifies.
Amit Agarwal
And are we exporting to America? Are we substituting that product, those products from India or we just stopped altogether? USA market
Ashish Srivastava
No, so I think the whole, I mean the whole value prop of that unit of that American silk mills which we had kind of created was to buy fabrics from all around the world, the fabrics which India cannot supply, and then work around with the retailers. Now given the situation which has happened that the retailers, you know, the way they are sitting with inventories, what we realize is that, you know, it is better because those fabrics cannot be substituted out of India. They are very high quality silk jacquards coming from Japan and other southeast markets which are being given to the retailers in US.
So what we have decided is that whatever our strength from our home textiles supply to the customer is, it is going to be direct. And us in home textiles still remains a very large export segment. So on the overall, if I have to give you a view where exports is roughly in the home textile, 60% of our total business is around exports. And in that 60%, almost 60% is us. So we are servicing directly to the customers and not through the subsidiary which was created earlier for the landed duty paid model.
Amit Agarwal
So the conclusion is that purchase of Americans has been a waste.
Ashish Srivastava
Well, you know, in the hindsight we can either call it a waste or it’s a feedback, you know, in terms of we at least know what we can do. Right. Next time.
Amit Agarwal
Okay, thank you. Thank you. That’s my last question.
Operator
Thank you. Participants, you may press star N1 to ask the question. Next question is from the line of Peruna Jinjunwala from Vilara Capital. Please go ahead.
Unidentified Participant
Thank you and congratulations on steady improvement. Just wanted to understand the yarn business. How are, how is the profitability changing in terms of various type of yarn like blended versus cotton? And what is your inventory storage policy in current environment when raw material prices are increasing? That’s my first question.
Ashish Srivastava
Sure. So I think I’ll break this into two parts. One is about the yan. I mean the yarn business in terms of the margins. See Prena. Thank you for the question. First. And I think the way we have classified our business is that whatever we do is mostly the value added segment of poly viscous. So it’s not the poly viscos because we also dye the fiber, we also dye the
Unidentified Participant
Yarn.
Ashish Srivastava
So to say. So it’s. So in terms of profitability, I would say the cotton melange, which we kind of do is number one on the profitability followed by PV diet and then the 100% cotton. So if these are the three stacks and we also do a lot of specialized yarns, which obviously is at a very high EBITDA profile. Or let’s say at a high contribution profile. So in terms of ranking the specialized ones, the PV died and then the 100% cotton. So that’s the stacking order. The second part is in terms of the inventory policy which we have, we maintain because on the polyester and the viscous, we don’t want to, we are not tempted to kind of take long positions in any of the raw materials.
We are still maintaining reasonable discipline on our inventory. We at this point of time or we maintain typically 30 to 45 days as far as cotton is concerned and about 15 to 20 days as far as the other fibers are concerned, where the availability is never an issue. Price of course can be an issue, but then it is always good to be little prudent in terms of managing our working capital.
Unidentified Participant
Understood. So a follow up on this in Blended vs Cotton Yan, you mentioned that the, the profitability is right now higher in the dyed yarn segment given our earlier margins. If we, if I recall you used to be around 10% plus EBITDA margin business earlier when other value added businesses were not there. Do you foresee that these kind of margins are coming back or where are we in that recovery journey? And generally cotton yarn margins are higher and blended went through a, you know, profitability issue.
So if you could help us understand the breakup, you know, how, how much is blended yarn for you and where is the profitability and where do we reach, where do we reach in some time, in two, three years. However your plans are. So it would help us in understanding the trajectory over longer term
Ashish Srivastava
For sure. So I will not be, I mean I will not like to be speculative in terms of giving you specific numbers, but I can definitely give you a direction. First of all, I’ll explain you that as to where this dip is coming and why this dip is coming. Now obviously we are a 9 decade old company which have been set up now cotton, the whole cotton yarn business, 100% raw cotton yarn business. There are new generations of machines which are more power efficient. And obviously our entry into renewable energy is also a little late.
So obviously there we stand at a disadvantage both in terms of the production and in terms of the cost to produce those yarns. We are correcting that. We are getting into renewables. And if you go through our sustainability report, we have kind of very clearly given a path as to currently from 11% of renewable how it will go to about 40%. So which will mean obviously that the power cost, which is roughly about 50% in the yarn cost manufacturing is going to get calibrated working around the other is we have also said that we want to replace almost 30 to 35% of our products into more value added products and our entries into segments like technical textiles or industrial yarns there that is more suited for our kind of working and the margins are much, much higher.
So I would say that we are on that recovery margin journey then we should when we will hit a double digit. Well, it will all depend upon how the markets behave, how the raw material price behaves. It may be not right to speculate on that. But year on year we are looking at a reasonable bump in our EBITDA margin or the operating profit.
Unidentified Participant
Understood, sir. So my second question on technical textiles here you are planning to be in yarn and fiber part of the value chain or you like you’re wanting to move forward integration into fabric and garmenting as well. So just wanted to understand.
Ashish Srivastava
Sure, sure. So I think if you look at Satledge, you know, I mean we are, are an integrated play. It’s just that our processing is based out of the processing for home textiles there we have a capacity of almost about 2 million meters, so to say. So we already have the ecosystem as mentioned in the specific note on technical textile which was uploaded yesterday. We are looking at adding specific equipments, but our processing capacity already exists. We are just supplementing some of it. And we are not looking why we are going to look at yarn fiber in the technical textile space.
We are also looking at fabrics and if possible, you know, looking at a full solution to our customers in times to come. So see this is a, this is. We have adopted a crawl walk, run kind of an approach here. So we want to. And since we understand this landscape well, we are deliberate about our strategy in terms of how we move around. It will all depend upon what market segments which we are kind of wanting to address and what are the needs at the end. Whatever. We intend to be a solution provider to our customers and to the market markets and whatever is required for them is what we are going to initiate our journey on that course.
Unidentified Participant
And so my last question is on demand. Do you see these improvements panning out even if the demand is subdued because of the strategy change that you are looking forward towards value added yarn or it will still be dependent on strong improvement in demand to large extent.
Ashish Srivastava
I mean most of these products in the value added segment are not. I mean there is already a demand. It’s a question whether we can produce it right and to the specifications of what the markets are looking at. The challenge is ensuring that the Product integrity is not compromised and we are continuously producing a consistent product which is required for the market. So we don’t see. And since we are just entering into, we don’t see a difference demand per se. A big challenge. We already have proof of concepts in this.
We are looking at some technical adjustments in our entire process to ensure that we are aligned to the market needs.
Unidentified Participant
Okay, any capex commitment for the year? Any number that you would want to highlight? Well,
Ashish Srivastava
As I said that you know, I mean we have internal plan but our capex plan for the year is very much milestone driven, you know. So I can. What I can tell you is I mean last year as per our numbers we have done roughly about 70 crores which is kind of gone in that will give the results in the coming year. This year what we have said is that I mean our budgets are obviously higher but it is all going to depend upon. So it’s a very milestone based, you know, I mean on quarter on quarter based on what numbers are coming in.
We are going to trigger those capexes but we have a reasonable capex plan. But at this point of time just talking about it maybe a quarter or two quarters later we’ll be coming out with more definite numbers.
Unidentified Participant
Sure sir. Thank you and all the best.
Ashish Srivastava
Thank you.
Operator
Thank you. Participants, you may press star N1 to ask the question. Next question is from the line of Rishabh from family office. Please go ahead.
Unidentified Participant
Hello. Thank you for the opportunity. I heard a discussion about Kiyan segment but I just wanted to have some more clarity because our utilization has been really strong between 85 to 89% throughout the years but our margins are still under pressure and looking at the global situation where cotton prices have been pretty volatile and the demand from key markets like China and Europe has been very uneven. So in the backdrop what are the key steps are we taking to improve the margins and which will be in a more sustainable way instead of like cost control or something like that.
If you can talk something about that.
Ashish Srivastava
So I mean just to correct our yarn segment capacity utilization is at 93% but percentage of effective spindle utilization is at about 89%. Now what it means is that what we have deliberately decided is as I said that you know, we are not chasing the quantity, we are chasing the quality. So when we change the quality it obviously means that we are wanting to focus on the value added product products. The challenge on the value added products is that it has to go through a cycle. What you do is initially a sampling lot or initially a test order and Then it is tested.
So the whole feedback loop is anything between six to nine months. So whatever we have kind of undertaken in the previous year, we will see those results falling in place even for the coming year. And that’s where we believe we are wanting to do so. What we have very clearly said is that we have identified our hero products and we have also identified our laggards. And on the laggards we are saying that at what point of time we say stop rather than continuing with them and keep focusing on building the HERO product categories which we have identified.
That’s the overall strategy,
Unidentified Participant
Correct? Understood, sir. So basically you’ll be focusing more on the HERO products and the value added products which you are mentioning, correct?
Ashish Srivastava
Yes.
Unidentified Participant
And so on the home textile side, our revenue was around 45 crores and our losses have reduced sharply From I guess 9cr to 1cr this year. So which I feel our operating leverage is starting coming in. And also on the global level, also I feel demand is improving. And what’s your view? Because I feel in the last three to four quarters US was majorly destocking their inventory. But now after the fair clarity on the tariffs right now I feel inquiries and orders would have started flowing in. And at the same time we are targeting around 20%, if I’m not wrong, for the revenue in this segment.
So what do you any commentary on this side?
Ashish Srivastava
Sure. So I think, you know, if you look at the home textile segment, I mean, there are different categories there. There is, you know, top of bed, which is where the bed sheet comes into play, the. Tapestry and the curtain where we kind of operate and as we had kind of said, and I want to repeat that we expect home textiles to grow meaningfully faster. And that is because we are positioned little differently. We are positioned in a design intensive, technically complex product categories which are not easy to replicate.
And that is the whole reason why in spite of the tariffs, our business grew is because of that, because the replacement of those products are not easy. Our overall turnaround at the EBITDA level from a negative 3.5 crore, we have kind of moved to 8.4 crore of EBITDA. You know, that’s the story on the home textile. And we are very confident that we’ll be able to at least double it or more in the coming year based on the strong order book position which we have and also the commitments which we have in place from our strategic customers.
Unidentified Participant
Right. So is it fair to understand in the next two to two years, maybe on EBITDA level it should be around 18 to 20 cr
Ashish Srivastava
I think, I mean I again don’t want to put a number. If, if I am right, if, if things go the way we have planned, you will see it in this year itself.
Unidentified Participant
Okay? Understood sir, understood. I don’t want you to put in a position. No, no worries. And so also on the technical textile which have been doing well for us, so in those products also what margins are we expecting compared to our current business?
Ashish Srivastava
So you know, typically in a technical textiles, on the protective textiles the margin ranges from anything from 12% to 15%, you know, depending on the product category, what kind of segments you are entering, whether it is inherent, whether it’s, whether it is treated. So there are a lot of complexities which will work around. But finally the margin profile there is much better and more importantly much sustained over a period of time. So that’s the segment which we are wanting to target.
Unidentified Participant
Correct. And so any specific industry are we targeting like automotive, healthcare or infrastructure wherein this fabric will be used? Any specific sector are we targeting?
Ashish Srivastava
I think you know, I mean for a. I mean protective textiles. While obviously the application is, I mean you know, if you are going to look at the inherent FR or the treated fr. The industries which come into mind is basically the oil and gas, the steel industry. So these are specific industries which kind of come into place but the application is much, much larger so to say. And
Amit Agarwal
What
Ashish Srivastava
We believe is that because of the recent developments which have happened where obviously the world is going after the oil and there is so much of damage which has been kind of created, there is going to be a resurgence of demand in the segment as we move forward. If we are able to put our house in order and deliver the products which we, which we, which we envisage to service.
Unidentified Participant
Correct. Correct so far. Thank you for the brief discussion and the answers. If I have any other questions I’ll join back. But that’s it for now. Thank you and all the best for the. Thank you Rishabh.
Operator
Thank you participants, you may press star and one to ask the question. Ladies and gentlemen, you may press star and one to ask a question. As there are no further questions I’ll now hand the conference over to the management for closing comments.
Ashish Srivastava
Well, thank you everyone for joining. Hope you found the interaction insightful. We look forward to engaging with you in coming times in a more intense way. Thank you so much.
Operator
Thank you very much on behalf of Satfaj Tech Tiles Industries Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.