Q1 2027 Sanathan Textiles Ltd Earnings Call Transcript
Key Points
- Sanathan Textiles Ltd (NSE:SANATHAN) reported a strong standalone EBITDA growth of 35.52% YoY, driven by disciplined raw material procurement and a favorable product mix.
- The company's Punjab facility achieved a capacity utilization of ~80% in Q1 FY2027, with a clear roadmap to reach 95-96% by Q3, indicating successful operational scale-up.
- Sanathan Textiles Ltd (NSE:SANATHAN) completed the installation of plant and machinery to double its technical textile capacity at Silvassa from 9,000 to 18,000 MTPA, with commercial production expected to commence shortly.
- The company maintained seamless operations at both facilities despite significant global supply chain disruptions, demonstrating strong supplier relationships and operational resilience.
- Management reaffirmed its FY2027 consolidated EBITDA guidance of INR 520-540 crores, reflecting confidence in improved demand visibility and the full-quarter contribution from the stabilized Punjab operations.
- The company is progressing on a 32 MW hybrid wind-solar captive power arrangement, which is expected to deliver a meaningful reduction in power costs as it comes online.
- Consolidated PAT for Q1 FY2027 declined significantly YoY to INR 23.82 crores from INR 40.43 crores, primarily due to the full depreciation and finance costs now being charged for the commissioned Punjab facility.
- The global yarn industry faced an unusual quarter defined by price volatility rather than demand, with geopolitical tensions in West Asia causing sharp increases in PTA, MEG, and cotton prices.
- Buyers deferred purchases in April and May due to rapid raw material price increases, leading to moderated industry operating rates and a delayed pass-through of higher input costs.
- Consolidated EBITDA margin contracted to 8.10% in Q1 FY2027 from 9.33% in Q1 FY2026, reflecting the impact of the lower-margin Punjab facility and raw material cost pressures.
- Raw cotton pricing and availability remain a key monitorable risk for the coming season, particularly given ongoing global disruptions emerging from climate-related risks.
- The company's reliance on imported PTA for its Silvassa facility (60% of requirements) exposes it to supply chain costs and volatility, with domestic alternatives only expected to materialize gradually.
Ladies and Gentlemen, Good day and welcome to Q1 and FY 2027 Earning Conference Call of Sanathan Textiles 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 conclude. (Operator Instructions).
Please note that this conference is being recorded. I now enter the conference over to Mr. Jude D'souza.
Thank you.
' -
Good evening, ladies and gentlemen. It is my privilege to welcome you all to the earnings conference call of Sanatan Textiles Limited for the first order of financial year 2026-2027.
Before we begin, I would like to remind everyone that certain statements made during this call, including comments on our outlook, expectations, future plans, capacity expansion, and business strategy, may be forward-looking in nature. These statements are based on management's current assumptions and assessments and are subject to various risks and uncertainties.
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