SANATHAN Q3 FY26 earnings call.
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Revenue
₹1,079 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹59.9 Cr
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Sanathan Textiles reported Q3 FY26 consolidated revenue of ₹178.7 crore (up 31.9% QoQ driven by Punjab ramp-up) with normalized EBITDA of ₹59.9 crore (5.6% margin). The margin compression versus prior quarters was attributed to multiple headwinds: GST rate change causing customer deferrals, removal of BIS QCO requirements creating temporary inventory pressure and pricing impact of 10-12% on FDY yarn (since partially recovered ~50%), and Punjab facility operating at 60-65% utilization with associated fixed cost drag. The Punjab polymerization facility reached 575 MTPD (targeting 700 MTPD by Q4 FY26 end), marking EBITDA-positive milestone. Guidance for FY27 targets ₹5,700 crore consolidated revenue with double-digit EBITDA margins, implying full earnings potential from expanded manufacturing base. Key risks include China dumping post-QCO removal (prices still down 6-7%), working capital pressure from inverted duty structure, and extended ramp-up period for new facilities. Management projects Q4 consolidated revenue ~₹1,200 crore with EBITDA of ₹90-100 crore.
Colored figures show movement against the previous available record.
Guidance to track
- Management targets ₹5,700 crore consolidated revenue for FY27 with double-digit EBITDA margin on consolidated basis, reflecting full earnings potential from Silvasa and incremental Punjab capacity.
- Management provided specific Q4 guidance of ₹90-100 crore EBITDA on consolidated basis with revenue of approximately ₹1,200 crore.
- Polymerization capacity at Punjab facility to reach 700 MTPD by end of Q4 FY26, with Phase 2 (950 MTPD) targeted for FY28 at incremental capex of ₹125-150 crore.
- Silvasa technical textile capacity doubling from 9,000 to 18,000 MTPA to be commissioned Q1 FY27 in one go (unlike Punjab phased approach), with half-quarter revenue in Q1 and full-year benefit thereafter.
Risks flagged
- Post-QCO removal, cheaper material flowed from China causing FDY prices to drop 10-12%; current prices remain down 6-7% despite partial recovery. DGTR anti-dumping investigation outcome uncertain.
- GST reduction from 12% to 5% increased inversion (previously 18% to 12%, now 18% to 5%), causing larger fund blockage. Government working on faster refunds but near-term working capital impact persists.
- Facility operating at 60-65% utilization with high depreciation and finance costs weighing on consolidated PAT. Full fixed cost absorption only when 700 MTPD Phase 1 capacity reached by Q4 FY26.
- US tariffs impacted orders from export-oriented customers (indirect exports ~25% of business; US ~5-7%). While India-US tariff settlement expected to revive demand from Q1 FY27, EU trade agreement benefits will take additional months.
Key quotes
- The QCO impact was reflected immediately whereas the raw material which also comes lower post the QCO is impacted slowly which I said we'll get the full advantage in this quarter coming quarter
- We are looking at a top line of about 5,700 for FY27 with a double digit EBITDA on a console basis. FY27 should reflect the normalized earning potential of our existing Silvasa facility along with the advantage of the incremental manufacturing capacity at Punjab
- We will be operating that 700 tons from Q1 FY27 through the year FY27 and the investment for that expansion is not very large because most of the work for that part of the journey has been done along with this so it's only a small capex maybe about 150 crores or 125 to 150 crores
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