RSWM Q3 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹1,091 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹82 Cr
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
RSWM reported Q3 FY26 revenue of Rs 1,093 crore with EBITDA of Rs 82 crore (7.4% margin), expanding 260bps YoY despite challenging demand. The 9-month revenue stands at Rs 3,412 crore with EBITDA at Rs 242 crore (7% margin). Management attributes margin improvement to favorable product mix, stable raw material costs, and operational efficiencies including 70% renewable energy adoption. PAT of Rs 4 crore in Q3 includes a Rs 10 crore exceptional charge for labor code compliance. The knitting capacity expansion of Rs 92 crore (20% increase to 900 tons/month) remains on track for H1 FY27, while the LJ Green PET project (Rs 427 crore capex) targeting Rs 475-500 crore revenue is expected operational in 12-15 months. Management targets double-digit EBITDA margins in 6-8 quarters, driven by new EU-India FTA (eliminating 8-12% tariffs) and restored US tariff parity at 18%. Key risks include Bangladesh yarn import uncertainty affecting near-term denim and milange segments, and execution risk on the capex-heavy expansion pipeline amid mixed demand conditions.
Colored figures show movement against the previous available record.
Guidance to track
- Management targets approximately Rs 5,000 crore revenue for FY27, implying ~10% growth from current annualized run-rate of Rs 4,500 crore, driven by improved capacity utilization in knit and milange segments.
- Management explicitly stated intention to reach double-digit EBITDA margins (10%+) within 6-8 quarters, supported by favorable US-EU tariff normalization and operational improvements.
- The Rs 92 crore knitting capacity expansion (adding 150 tons/month to reach 900 tons/month) including 120 tons/day printing facility remains on track for H1 FY27 completion.
- Food-grade recycled resin facility in Sehore, MP targeting Rs 475-500 crore revenue, funded at 70:30 debt-equity ratio (Rs 300 crore debt, Rs 127 crore equity).
Risks flagged
- Bangladesh spinning lobby is pushing for higher import duties on yarn from India, which could impact RSWM's denim and milange business in the near-to-medium term despite tariff parity normalization with the US.
- The tariff relief with the US (reduced to 18%) and EU FTA implementation (expected January 2027) create optimistic outlook, but actual order inflow recovery may take 1-2 quarters to materialize with visible volume improvement.
- Management acknowledged that shifting from low-margin to high-margin products was only partially executed in knit, milange, and denim businesses due to market sentiment challenges, requiring another 3-4 quarters to fully implement.
- Combined capex commitments of Rs 519 crore (Rs 92 crore knitting + Rs 427 crore Green PET + Rs 22-25 crore solar) require significant cash deployment over 12-15 months while maintaining working capital costs below 9%.
Key quotes
- We expect this EBITDA to be sustained in coming quarters in near and mid-range quarters also. The volume should look better in first quarter next year and EBITDA margin in this quarter and next quarter should be maintained in similar range.
- Our thought in RSWM is we give back to society what we take. So sustainability is really at the core of all the operations we do in RSWM.
- I will be one of the happiest person when we touch double digit and intention of entire management including Manoj, Nitan is to take this company in next maybe six to eight quarters to that level of double digit and with this US tariff, UK tariff and EU FTA on so there is every likelihood that we may travel this journey even further.
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