Release Date: May 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Himatsingka Seide Ltd (BOM:514043, Financial) has achieved a high capacity utilization rate of 99% in its spinning division.
- The company is optimistic about growth prospects in the Indian market, with plans to expand its brand presence across various price points.
- The recently signed FTA between India and the UK presents potential growth opportunities for the company.
- Himatsingka Seide Ltd (BOM:514043) is on track to achieve its sustainability goals, aiming for 100% renewable energy by 2030.
- The company has successfully reduced its consolidated net debt from 2,634 crores to 2,425 crores, indicating progress in deleveraging efforts.
Negative Points
- The company's total income decreased by approximately 3% due to recalibration initiatives in its brand portfolios.
- Himatsingka Seide Ltd (BOM:514043) is facing short-term revenue and margin impacts due to recent tariffs imposed by the United States.
- The recalibration of brand portfolios is still ongoing, with an estimated 150 crores of annual impact yet to be addressed.
- Working capital days remain high, exceeding 200 days, which affects the company's financial flexibility.
- Interest costs have risen despite a reduction in long-term borrowings, due to other charges affecting the financial line.
Q & A Highlights
Q: With regards to the recalibration of revenue, is that now complete, and how do you see revenue numbers in terms of growth?
A: We are nearly at the end of this calibration exercise, with approximately another 150 crores of annual impact to make up for. Growth in Q1 might be muted due to tariffs, but we expect organic growth to resume thereafter. – Executive Vice Chairman and Managing Director
Q: How should we look at the overall working capital rationalization and debt reduction for the year?
A: We have corrected gross debt by just under 300 crores. We expect to reduce leverage by 100 to 200 crores through initiatives like non-core asset sales and organic business operations. – Executive Vice Chairman and Managing Director
Q: Can you provide an update on the territorial segment and its capacity expansion plans?
A: The territorial segment remains strong, and we plan to expand capacity from 25,000 to 40,000 tons over the next 18 to 24 months, focusing first on utilizing current capacities. – Executive Vice Chairman and Managing Director
Q: How is the macro environment affecting your business, particularly with tariffs and FTAs?
A: The macro environment includes tariffs, FTAs, and geopolitical factors. Tariffs are currently at 10%, impacting Q1 slightly. The FTA with the UK is expected to benefit us once it comes into effect, enhancing market share. – Executive Vice Chairman and Managing Director
Q: What is the status of your India operations and brand reach?
A: We operate with three brands in India, present in approximately 4,000 points of sale. We aim to expand this footprint and expect to reach between 100 and 200 crores in revenue from India in FY26. – Executive Vice Chairman and Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
