Sutlej Textiles and Industries Limited — Q3 FY26

Sutlej Textiles And Industries Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=8RpR3bgzZ54 Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Q3 and 9 months FY26 earnings conference call for Settlers Textile and 0:08 8 seconds Industries Limited. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to ask question after the 0:16 16 seconds presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. 0:25 25 seconds I now hand over the conference to m Mr. Sachin Karva, chief financial officer. Thank you and over to you sir. 0:32 32 seconds Thank you. Good morning everyone and welcome to the earning conference call of Satlas textiles and industries limited for Q3 and 9 months ended December 31st 2025. 0:42 42 seconds I will begin with a brief overview of the operating and financial environment followed by our performance trend for the quarter. The third quarter continued 0:51 51 seconds to be challenging for textile industry globally. While there has been optimism around recently announced FTAs, we believe the actual benefit will take 0:58 58 seconds some time to materialize as seasonal order placements were largely finalized earlier. At the same time, the industry faced persistent headwinds and elevated 1:07 1 minute, 7 seconds raw material prices, currency volatility, geopolitical developments and logistical issues particularly in Bangladesh. Despite these challenges, 1:16 1 minute, 16 seconds Slush has delivered a stable and resilient performance in Q3. We have recorded an improvement over Q2 both operationally and financially and we 1:24 1 minute, 24 seconds expect Q4 to build further on this momentum especially in terms of profitability. 1:30 1 minute, 30 seconds On the cost side, raw material prices increased during the quarter even as demand remained relatively muted. 1:35 1 minute, 35 seconds Polyester and visos prices although impacted by higher crude and currency movements remained largely stable while cotton showed a marginal decline. Our 1:45 1 minute, 45 seconds fiber business played an important role in supporting the yarn segment by providing stability and partial insulation from volatality. As a result, 1:53 1 minute, 53 seconds combined yarn and fiber margins have improved security. We have also started seeing the impact of our cops optimization initiatives, employee cost 2:02 2 minutes, 2 seconds rationalization and operational efficiency measures have delivered around 30 to 40% of the targeted benefit so far with the further improvements 2:10 2 minutes, 10 seconds expected over the coming quarters. These efforts are largely translating into gradual operating margin expansion. From 2:18 2 minutes, 18 seconds a utilization perspective, our fiber and home textile divisions are operating at planned levels. Yarn utilization remains stable, although certain capacities 2:27 2 minutes, 27 seconds continue to face margin pressure due to raw material inflation. Overall, we remain disciplined in aligning production with demand and profitability 2:35 2 minutes, 35 seconds rather than chasing volume. Talking about quarterly financial performance, the standalone total income came in at 2:42 2 minutes, 42 seconds INR 640 cr which was lower by 2% on yearon-year basis. Gross margin was at 46% which was higher by 350 basis point 2:50 2 minutes, 50 seconds on year or year basis. EIA increased over 200% on year-over-year basis and stood at INR 25 cr with a margin at 4%. 2:59 2 minutes, 59 seconds At for the quarter pack was reported negative 11 crores 3:08 3 minutes, 8 seconds on balance sheet position. Our balance sheet position remains under control and we continue to follow a prudent approach towards working capital and capital 3:16 3 minutes, 16 seconds allocation. Maintenance capex is being incurred as planned while future growth capital will be evaluated holistically aligned with product market optimization opportunities and value added segments. 3:28 3 minutes, 28 seconds With this I would now invite our whole time director and CEO Mr. Ashish Shriasta to share the business and strategic update. 3:36 3 minutes, 36 seconds Thank you Sachin and good morning everyone. Uh let me come direct as to where we stand. Q3 performance improved 3:45 3 minutes, 45 seconds sequentially. Q4 should be better than Q3 and we are executing our strategic pivot with precision. But more 3:53 3 minutes, 53 seconds importantly, what you are seeing in these quarterly results is the foundation of something larger. A transformation from a commodity textile 4:00 4 minutes player to an integrated platform company with clear paths to value creation. The FDA announcements have created positive 4:07 4 minutes, 7 seconds sentiment and we welcome that. But we are not waiting for policy benefits to flow through. We are driving results 4:15 4 minutes, 15 seconds through execution. Today, let me walk you through what we have accomplished in this quarter and more critically where this position us for the future. 4:24 4 minutes, 24 seconds Starting with our business performance, we have achieved three significant wins that demonstrate strategic progress, not just operational management. A market 4:33 4 minutes, 33 seconds diversification, we have opened newer markets in Far East and and in Africa, adding to our existing uh international 4:42 4 minutes, 42 seconds presence. Now this isn't just a geographic expansion for the sake of it. It's a deliberate risk mitigation. 4:49 4 minutes, 49 seconds Bangladesh which faced severe logistical disruptions now represents a smaller share of our export book. We have protected volumes while reducing 4:58 4 minutes, 58 seconds concentration risk and frankly this was a test of whether our diversification strategy works under pressure. It does. 5:06 5 minutes, 6 seconds The pipeline for additional market entries in Southeast Asia and Latin America is active and progressing. 5:12 5 minutes, 12 seconds Export volatility isn't going away. We are cleareyed about that. But our market footprint is now structurally stronger 5:19 5 minutes, 19 seconds and more resilient. Domestically, we are seeing strong traction in synthetic and blended yarns which validates our 5:26 5 minutes, 26 seconds strategic shift towards higher margin technical products where customer switching costs are higher than our integrated capabilities provide a 5:34 5 minutes, 34 seconds genuine cooperative advantage. Now let me address the elephant in the room. 5:38 5 minutes, 38 seconds Home textiles in the tarot question. Our revenue growth continues in this segment and here's why. We are positioned in 5:45 5 minutes, 45 seconds complex design intensive products that cannot be easily replicated or substituted. We are not competing on price and commodity segments where 5:53 5 minutes, 53 seconds tariffs would hurt us. We are competing on design capability, technical complexity and speed to market in the premium end of the market. Order 6:01 6 minutes, 1 second visibility in this segment remains healthy through Q1 of next year. Yes, customer globally are managing inventories cautiously, but our order 6:09 6 minutes, 9 seconds book reflects strong demand for our specific capabilities. The turnaround in this division is complete and it's now it's now a growth and margin accurative business, not a restructuring story. 6:23 6 minutes, 23 seconds What ties all this together is our integrated model and this is where I want to spend some time because it's central to understanding our competitive 6:31 6 minutes, 31 seconds advantage. The fiber business isn't just supporting yarn. It's providing stability that standalone yarn players 6:38 6 minutes, 38 seconds simply cannot replicate. When raw material volatility strikes, our inter our internal integration absorbs shocks and compettors which that compettors 6:46 6 minutes, 46 seconds must must either pass through to the customers or absorb in their margin margins. This is precisely why combined 6:53 6 minutes, 53 seconds fiber yarn segments improved sequentially despite cotton and polyester pressure price pressures. 7:00 7 minutes While yan profitability remains under pressure from raw material and inflation, the integrated model is holding and more importantly it positions us to capture value across the 7:09 7 minutes, 9 seconds entire chain as market conditions normalize. Which brings me to the bigger picture where we are taking this company. We are not just running these 7:18 7 minutes, 18 seconds three separate businesses. We are building an integrated textile platform with specific defensible capabilities that unlock adjacency opportunities. And 7:28 7 minutes, 28 seconds I want to be very clear about what this means in practical terms. Our platform today comprises backward integrated 7:35 7 minutes, 35 seconds fiber manufacturing with polyester, multicategory yarn production across synthetic, cotton and blended segments. 7:43 7 minutes, 43 seconds Design-led home textile manufacturing with complex product expertise. 7:48 7 minutes, 48 seconds Established distribution across 15 plus countries and with diversified customer relationships and process excellence 7:55 7 minutes, 55 seconds that makes that meets global technical standards. Each of these capabilities took years to build. The question we 8:02 8 minutes, 2 seconds have been asking ourselves where else can we deploy these capabilities to create value. We have identified clear paths as and these are not theoretical. 8:12 8 minutes, 12 seconds We are already in pilot or evaluation stages as far as these parts are concerned. First is technical text 8:19 8 minutes, 19 seconds textiles and performance fabrics. Our fiber and yarn capabilities position us naturally to enter industrial textiles, automotive fabrics and protective 8:28 8 minutes, 28 seconds textiles. These are higher margin specificationdriven segments where our technical expertise and quality systems 8:34 8 minutes, 34 seconds are directly transferable. Second is sustainable and circular products and this is where market pool is accelerating faster than we initially 8:42 8 minutes, 42 seconds expected. Custom demand for recycled polyester, biio-based fibers, and traceable supply chains isn't a nice to 8:50 8 minutes, 50 seconds have anymore. It's becoming a requirement in several markets. Our integrated model allows us to develop closed loop systems. 8:58 8 minutes, 58 seconds Also giving us the flexibility of using postconumer waste where required in our fiber production and creating fully 9:05 9 minutes, 5 seconds traceable yarnto fabric solutions. we have initiate we we already have uh the recycled pet and this is this isn't a 9:13 9 minutes, 13 seconds CSR positioning this is a commercial opportunity where customers will pay premium and where reg regulatory tailwinds in Europe and North America 9:21 9 minutes, 21 seconds are creating structural not cyclical demand is vertical integration into downstream applications 9:30 9 minutes, 30 seconds here's a key point I want to emphasize these adjacencies leverage our existing platform we are not diversifying into unrelated businesses or chasing growth 9:38 9 minutes, 38 seconds for the growth sake. We are extending into segments we are already we already have a comparative advantage where our 9:45 9 minutes, 45 seconds capabilities are differentiated and where the economics are superior to our core business today capital allocation 9:53 9 minutes, 53 seconds will be disciplined we are we are conscious of our targeted IRS and payback periods where possible we'll 10:01 10 minutes, 1 second prioritize asset light models through partnerships and tolling arrangements our cost and efficiency on cost and efficiency Employee 10:10 10 minutes, 10 seconds rationalization and process improvements have delivered till now roughly about 40% of our targeted annual savings. The remaining benefits will flow over the 10:18 10 minutes, 18 seconds next 2 three quarters. But this isn't a one-time one-time cost reduction exercise. We are embedding continuous 10:26 10 minutes, 26 seconds improvement into how we operate on utilization. We are being deliberate. We are not chasing volumes at suboptimal 10:32 10 minutes, 32 seconds margins. Fiber and home textiles are at planned utilization. In yan we are running capacities where we have pricing power and product differentiation. As 10:41 10 minutes, 41 seconds our product m shifts towards value added segments utilization will increase without margin dilution. 10:48 10 minutes, 48 seconds Our investment thesis is straightforward. We are transforming from commodity textile player to an integrated innovationdriven platform company. Our businesses are improving 10:57 10 minutes, 57 seconds sequentially. Our strategic priorities are funded and on track and our platform and our platform capabilities unlock 11:04 11 minutes, 4 seconds agencies that create differentiated value for all stakeholders. Customers get innovation and reliability. 11:10 11 minutes, 10 seconds Employees get a growing sustainable business to build carriers in and you our shareholders get improving returns on more resilient higher margin business 11:19 11 minutes, 19 seconds models. External headwinds are real. Raw material volatility, geographical uncertaintity, currency movements are 11:27 11 minutes, 27 seconds all there to stay. We are not dismissing these, but our strategic direction is clear. Execution is disciplined and we are building structural competitive 11:35 11 minutes, 35 seconds advantages that compound over time. Q4 should demonstrate our continued momentum and the next year will demonstrate strategic transformation. 11:45 11 minutes, 45 seconds Thank you for your support and continued trust in selfless text. 11:52 11 minutes, 52 seconds Happy to take any more questions which might come. 11:57 11 minutes, 57 seconds Thank you very much sir. We will now begin the question and answer session. 12:02 12 minutes, 2 seconds Anyone who wishes to ask question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. 12:12 12 minutes, 12 seconds Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. 12:29 12 minutes, 29 seconds The first question is from the line of Nish Sha from Steeler AMC. Please proceed. 12:37 12 minutes, 37 seconds Hello. Hi sir, I'm audible. Yeah, very much audible. 12:42 12 minutes, 42 seconds Thank you for the opportunity. So my first question is on my margins have improved slightly this quarter but they 12:49 12 minutes, 49 seconds are not still at comparable level. So what are the key levers which can improve margins from here? 12:57 12 minutes, 57 seconds So I think as I address in my in my I mean in my speech that you know basically what we are looking at cost efficiency because that's something 13:06 13 minutes, 6 seconds which is internal markets while we don't have direct control over the consumer or the customer demand but we are looking 13:13 13 minutes, 13 seconds at market diversification which is a process which is on and third and the most important which is inherent to our growth is product diversification or 13:21 13 minutes, 21 seconds product value upgrade. So we have seen some benefits acrewing in in in in the last quarter and we we are confident 13:30 13 minutes, 30 seconds that you know this trend is going to only continue in the coming quarters. 13:34 13 minutes, 34 seconds Okay. So what margin levels are we comfortable at? 13:38 13 minutes, 38 seconds So I think you know it will be right now speculative of me to kind of put in let the Q4 set in and we'll all will see where we are kind of heading to but all 13:47 13 minutes, 47 seconds I can say is that I mean we are in the right direction. 13:51 13 minutes, 51 seconds Okay. Uh so just uh one more thing on that uh so uh given that the margins we are will be seeing positive from Q4 uh 14:00 14 minutes let's say uh the revenue and what revenue and levels do you see are comfortable to see a P turning positive 14:09 14 minutes, 9 seconds so I think again you know we are right now focusing on the operating margin right and what we are saying we are not 14:15 14 minutes, 15 seconds chasing volume business so it's more about a turnaround through internal controls and product upgrades. Now as 14:24 14 minutes, 24 seconds the product upgrades happen the top line automatically will increase but it's not that we are adding valu volumes in our 14:32 14 minutes, 32 seconds nonvalue added segment. So even at similar top line we can expect much 14:40 14 minutes, 40 seconds better margins that's what we are chasing at this point of time. 14:46 14 minutes, 46 seconds Okay sir understood. So are we actively reducing our exposure to low margin segments? 14:51 14 minutes, 51 seconds For sure. So I think you know if you have seen that you know so within the three clusters you know home textiles we 14:58 14 minutes, 58 seconds are in any case in the in the niche segment where the margins are comfortable. Fiber segment is truly 15:05 15 minutes, 5 seconds supporting the growth and as far as the yarns is concerned it is our stated objective that in about a year's time we want to move one/ird of our portfolio 15:14 15 minutes, 14 seconds into value added yarns. Now obviously this will mean that our bottom line will get supported uh to a large extent when 15:22 15 minutes, 22 seconds we uh clearly pivot and kind of execute this road uh road map. 15:29 15 minutes, 29 seconds Okay. Okay. So with the India and US trade situation evolving uh so what could be the potential risk or opportunities for our business? 15:38 15 minutes, 38 seconds So I think you know again it's uh that's a good tailwind is what I can say. Now 15:45 15 minutes, 45 seconds you see what happens is that even if it gets operationalizes in the next uh 2 weeks or 3 weeks the real effect of this 15:53 15 minutes, 53 seconds will only be seen in in about two quarters because you see the placement of the orders which had to happen you know if you were to look at from the 16:00 16 minutes customer side for the for the uh uh now spring summer has already been done. So it takes a cycle before people will want 16:09 16 minutes, 9 seconds to kind of come around and uh look at increasing exposure into India. But it's a very welcome change is all I can say. 16:16 16 minutes, 16 seconds You know it's a welcome change. It it brings the uh sentiment quite positive and it will 16:23 16 minutes, 23 seconds help boost the apparel trade and the textile trade also for uh the country. 16:30 16 minutes, 30 seconds Okay sir. Understood. Sir uh given the Bangladesh issue sir any uh issue leading to long-term presenting pressure 16:39 16 minutes, 39 seconds or do we believe that I think uh yesterday was a big event there we are hoping that once the 16:46 16 minutes, 46 seconds results come then there is an elected government which comes into place and all uh discussions can only happen with 16:54 16 minutes, 54 seconds an elected government till now it was an interim government so it was difficult to kind of get uh our point of view to 17:01 17 minutes, 1 second them So once the elected government comes in then possibly things might change and it might open bigger or it 17:09 17 minutes, 9 seconds will it might again reset the Bangladesh India trade ties. 17:15 17 minutes, 15 seconds Okay sir. Okay. So given the entire global demand uncertaintity and Bangladesh trade disruptions are we seeing any demand patterns change in for 17:24 17 minutes, 24 seconds a milange and synthetic yarn is there some change in customer preference or how did it come? 17:31 17 minutes, 31 seconds So I think you know what is happening is that obviously the lead times when it goes away so on the synthetic side the domestic market is quite buoyant you 17:40 17 minutes, 40 seconds know I mean it is growing so that is where most of the thing goes. We also have in the domestic we also have in the diet segment in the in the synthetic 17:48 17 minutes, 48 seconds side diet segment a lot of knit applications which are coming in. So a new product category is kind of emerging. So that is quite uh quite a 17:57 17 minutes, 57 seconds good uh uh change which is kind of happening on the milange cotton milange. 18:03 18 minutes, 3 seconds Uh we see some trend you know moving from milange to Yandai because again because of the speeds and everything else and uh because that was on the 18:13 18 minutes, 13 seconds milange I mean they were not wanting to they wanted to not hold larger inventories because that's that has been the case with most of the uh retailers. 18:21 18 minutes, 21 seconds So there was there is a small change. We are also calibrating at our end as to how we can balance or make capacities 18:29 18 minutes, 29 seconds funible between our fiber dyed and a yand dyed uh cotton. 18:35 18 minutes, 35 seconds Okay sir. So last question. So recently there was articles on that if we purchase India purchases US forensics 18:44 18 minutes, 44 seconds from uh US there will be no terrorist and similar option is also given to Bangladesh. So what impact will it have? 18:53 18 minutes, 53 seconds So I think if you see till till December last year they had opened up 19:00 19 minutes uh the cotton imports right without duty. Okay. 19:04 19 minutes, 4 seconds So it was already there. Now from after December they they said that you know you can import the cotton. Now what 19:12 19 minutes, 12 seconds effect it will have will all depend on what customers are kind of looking at whether we also are waiting to see the 19:20 19 minutes, 20 seconds fine print that you know if we are importing the the the cotton uh the US cotton whether those garments are going 19:29 19 minutes, 29 seconds duty-free there are certain restrictions as I as I understand that you know there will be uh certain quotas I mean certain 19:36 19 minutes, 36 seconds quantity quotas and all which are there so we are waiting for the fine print to kind of come in and then only we will be it will be prudent to kind of comment on it. 19:44 19 minutes, 44 seconds Okay sir. Okay. Thank you sir so much for answering all the questions patiently and all the rest. 19:50 19 minutes, 50 seconds Thank you. So no problem. Thank you Nish. 19:54 19 minutes, 54 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star and one 20:01 20 minutes, 1 second now. I repeat to ask a question please press star and one this time. 20:08 20 minutes, 8 seconds The next question is from the line of Shankhar Raja from an individual investor. Please proceed. 20:16 20 minutes, 16 seconds Hello, am I audible? 20:19 20 minutes, 19 seconds Yeah, you're very much a Yeah, thank you sir. Thank you for this opportunity. My questions are focused on uh home textile segment of ours. So sir, what is the strategy in this segment? 20:29 20 minutes, 29 seconds Are we focusing more on growing the volumes aggressively or is the focus more on improving the margins and sending the product? 20:39 20 minutes, 39 seconds No, I think uh what we had very clearly I mean in my in my introductory comments what I had said is that our uh home 20:46 20 minutes, 46 seconds textile business is one thing which in spite of the increase in tariffs did not 20:53 20 minutes, 53 seconds uh did not face any headwinds. uh that was purely because we are positioned in 21:01 21 minutes, 1 second a in a design intensive products and which cannot be easily uh you know substituted they cannot supply chains 21:08 21 minutes, 8 seconds cannot move. So we continue to work on this strategy on focusing on more value added uh pieces in the home textiles uh 21:18 21 minutes, 18 seconds and we are looking at a market diversification. So you know while we were uh we are doing reasonably okay in 21:25 21 minutes, 25 seconds the US market in the segments there are enough opportunities which are presenting themselves in in different other geographies. The other thing which 21:33 21 minutes, 33 seconds we are looking at in the home textiles we have incubated the whole madeups story there and that has contributed to 21:43 21 minutes, 43 seconds some revenue in this year. We are going to build the madeups as I said you know I mean how do you go from midstream to a 21:52 21 minutes, 52 seconds little bit of um further midstream not really the downstream where you not only do just the uh substrate which is the 22:00 22 minutes fabrics but also provide the products whether it is uh something like a bed in 22:06 22 minutes, 6 seconds a bed in a box or something like uh the kitchen uh over the table uh piece 22:14 22 minutes, 14 seconds that's something which we are evaluating. So uh to answer your question straight we are looking at operating in the value seg in the value 22:22 22 minutes, 22 seconds added segment and continue to grow that particular piece. 22:28 22 minutes, 28 seconds Okay. So, thank you. Uh and another thing was on order book. You did mention we have order book visibility till Q1 in your opening remark. Would you like to 22:37 22 minutes, 37 seconds quantify that in some context or could give you uh could you just say whether it's a strong order book or something? 22:44 22 minutes, 44 seconds No. So I think it's when I say the Q1 so I mean ideally it's not a uh because that only means that uh I mean these are 22:52 22 minutes, 52 seconds you know the whole entire home textile business part of it is the catalog business part of it is the uh you know 22:59 22 minutes, 59 seconds uh uh which goes into the US market or the Europe market. When I say the order book is yard of there is a visibility of 23:09 23 minutes, 9 seconds f_sub_1 f_sub_5q1 which means I have a reasonably long order book which is close to about 120 days. Now that may 23:16 23 minutes, 16 seconds also force us to relook at uh you know debottleing some of our capacities so that we can really uh really take 23:24 23 minutes, 24 seconds advantage and uh build our volumes also in this segment. So it's a it's a good problem to have. We are trying to see 23:32 23 minutes, 32 seconds how to uh you know kind of streamline this entire piece. 23:39 23 minutes, 39 seconds Great. Okay. Thank you for that. Uh so this answers my near-term uh visibility but what about the long-term visibility of this segment? Uh so do you think this 23:48 23 minutes, 48 seconds segment could be a you know meaningful profit contributor in the long term or say over the next two years or three years or for sure I think so what so what we so 23:57 23 minutes, 57 seconds sorry yeah continue I mean complete the question. to understand will this be a meaningful quant profit contributor or will yarn be our core focus of the 24:06 24 minutes, 6 seconds business like how so at this point of time this is just about the textile piece is just about five to 7 to 8% we want to build it to 24:14 24 minutes, 14 seconds 20% of our total volume or total topline okay so we want to double the business in home tech 24:22 24 minutes, 22 seconds okay so with that team in our domestic markets I can see our uh you know total active stores in this segment was around 24:31 24 minutes, 31 seconds 480. So are we uh thinking to add more stores? 24:35 24 minutes, 35 seconds So I think our domestic strategy is a slightly different. We are going to focus more on modern trade and uh more 24:42 24 minutes, 42 seconds on uh OEMs as we would call it and also you know kind of grow our brand uh which is homegrown brand called Nesta. So 24:51 24 minutes, 51 seconds these are the three things which are uh where we are focusing on and growing on. 24:56 24 minutes, 56 seconds Okay. Okay. And one last thing apart from the top three states that's mentioned are PPT that's Maharashtra, Gujat and Delhi. Are there any upcoming states that you would want to focus on? 25:07 25 minutes, 7 seconds Sure. We are focusing we are looking at the south region very very uh closely and trying to see what is the best uh way to expand our footprint there. 25:17 25 minutes, 17 seconds Okay sir. Thank you. Thank you so much for this opportunity. I'll join back with you if I have anything else and all the wish for your future. Thank you. Thank you so much Shanker. 25:25 25 minutes, 25 seconds Thank you. 25:27 25 minutes, 27 seconds The next question is from the line of Raj Doshi, an individual investor. Please proceed. 25:36 25 minutes, 36 seconds Hello. Uh thank you for the opportunity. Uh am I audible? 25:40 25 minutes, 40 seconds Yeah Raj, you're audible. Please go ahead. 25:43 25 minutes, 43 seconds So uh you have mentioned about the value added products. So uh can we know what is the current miss mix of value added 25:50 25 minutes, 50 seconds product and how do we uh how do we expect it to shift uh meaningfully uh in 25:57 25 minutes, 57 seconds in near future. So I think as I said that I did mention that we would like to have at least one/ird of our products 26:05 26 minutes, 5 seconds you know uh in the value added segments when I say the application segment you see the the yarns what we do they go in 26:14 26 minutes, 14 seconds for various applications they go in for apparel knit or woven they go in for 26:21 26 minutes, 21 seconds uh uh industrial uh applications they go in for uh the technical textiles as 26:29 26 minutes, 29 seconds basically the FR piece which is there and uh in the automotive segment. So what we would want uh so this is from 26:37 26 minutes, 37 seconds the application lenses right from the from the from the fiber lenses what I what I mean is that how do we move up 26:46 26 minutes, 46 seconds from uh the basic uh cotton polyester visos to either circular or postconumer 26:55 26 minutes, 55 seconds cotton uh recycle polyester or other uh 27:02 27 minutes, 2 seconds fibers like you know aramids or sustainable alternative fibers which uh which should form part of our 27:10 27 minutes, 10 seconds portfolio. We are we are already engaged uh in almost all of them. We just have to build volumes on this. 27:18 27 minutes, 18 seconds Okay sir. And how uh different are margins in value added yarn compared to the regular yarn? So it all so I think 27:26 27 minutes, 26 seconds definitely the the the so if you look at the basic raw cotton right uh the raw cotton yarn I mean the gray yarn which 27:34 27 minutes, 34 seconds we which kind of goes in the value addition I can only give you the spectrum you know I mean that's where uh 27:42 27 minutes, 42 seconds the uh the whole uh piece on valuation is the lowest and it requires continuous 27:50 27 minutes, 50 seconds investments uh reduction of uh uh the power cost and 27:57 27 minutes, 57 seconds then on the extreme end so I will I mean if I were to say that you know I mean a fiber a cotton fiber maybe let's say is 28:04 28 minutes, 4 seconds a $1.5 per kg the fiber itself and let's say the aramid which is there or the kvlar 28:11 28 minutes, 11 seconds which is there is like a $40 so uh that's the spectrum now obviously when you look when you look at somewhere in 28:19 28 minutes, 19 seconds between or where you kind of come into sustainable hemp it's somewhere around $5 you I mean um there is uh flax which 28:27 28 minutes, 27 seconds is there, there's banana fiber which is there, there's recycled cotton which obviously gets you a premium. So it's the whole straddle you know which is 28:34 28 minutes, 34 seconds there and as you go up the fiber chain u there's obviously a little better value which you can capture in the entire process. 28:44 28 minutes, 44 seconds Okay. Okay. Sure. But there is any margin range which you could could provide right now. So again it all 28:51 28 minutes, 51 seconds depends because you know they are challenges but definitely the margins are I mean if if I were to say that there is a 1x margin in in the basic 29:00 29 minutes cotton you could go up to at least 2.5 times in in the specialy products. Okay. 29:06 29 minutes, 6 seconds Sure. And also uh related to cotton prices uh now like there are there were price increases uh in cotton. So how how 29:16 29 minutes, 16 seconds did that impact like uh domestic prices were higher than the global level. So how did did it impact our exports? 29:24 29 minutes, 24 seconds So you know again if you look at primarily so overall it's surely impacted for the country but if you look at from the surplus point of view in our 29:33 29 minutes, 33 seconds total portfolio cotton per se is roughly about 42 42%. Right? And the balance is more the synthetics play which we have 29:41 29 minutes, 41 seconds and even in the synthetics the prices have kind of gone up over a period of time. So in cotton the price has which 29:50 29 minutes, 50 seconds was 51 52,000 has gone up to 55,000 in the in the range what we operate upon. 29:56 29 minutes, 56 seconds So yes it did have an effect but lot of it because in the in the basic cotton uh 30:02 30 minutes, 2 seconds the pricing uh gets normally when there is a cotton increase gets passed on to the market. 30:10 30 minutes, 10 seconds Okay. Okay. Sure. So that answers my question. Uh if I have anything I will I will fall back in queue and uh thank you 30:18 30 minutes, 18 seconds and all the best. Yeah, thank you Raj. Thank you. Thank you. 30:25 30 minutes, 25 seconds The next question is from the line of Deepak Carva an individual investor. Please proceed. 30:32 30 minutes, 32 seconds Hello I'm audible. Hi Deep you're audible. 30:39 30 minutes, 39 seconds Okay. Uh so sir my question is regarding the global conditions. So like global scenario in like what gives you a 30:47 30 minutes, 47 seconds confidence that money can improve looking about the global condition uncertaintity is it like cost reduction 30:54 30 minutes, 54 seconds better product mix or renewable power or something else so I think you know I mean if you were 31:01 31 minutes, 1 second to look at the global uncertainty I think that is there to stay you know I mean it's not something now it is that's an event you know and you you give 31:10 31 minutes, 10 seconds strength to the event by the way you react to it your response respond to it. 31:14 31 minutes, 14 seconds So what we are saying is that in a way it is a good wakeup call for India you know I mean whatever the tariffs which 31:21 31 minutes, 21 seconds kind of came into India because we were highly indexed almost 33% of our total exports of the textiles was indexed into 31:31 31 minutes, 31 seconds out of the 33 $35 billion which we do almost 10 to 12 billion was US and obviously the US do offers the comfort 31:39 31 minutes, 39 seconds of the larger volumes and continuous orders but I I think uh what it did uh to the community and I think if you were 31:48 31 minutes, 48 seconds to look back 5 years from now and see it's a wakeup call because people have started looking at what are the options 31:54 31 minutes, 54 seconds and evaluating how to de-risk geographies even from a supply point of view. So a newer geographies will open 32:03 32 minutes, 3 seconds up b see the cost efficiency and the process efficiency has to be there that has become a hygiene you know I mean you 32:10 32 minutes, 10 seconds can't uh uh you know you can't uh compete uh with a new age uh vehicle in 32:17 32 minutes, 17 seconds the old uh construct so to say. So you will have to kind of invest there continuously if you have to remain in this entire business. You have to manage 32:26 32 minutes, 26 seconds your energy cost as you kind of move forward on that. The value addition gives you the edge as as we have seen 32:33 32 minutes, 33 seconds that if you are into a segment where your stickiness is higher with the customer, it is difficult for the 32:39 32 minutes, 39 seconds customer also to move away from you in spite of everything what happens you 32:45 32 minutes, 45 seconds know. So that I would say uh value added product more integrated supply chain to 32:54 32 minutes, 54 seconds the customer supply chain gives you the uh added advantage. Uh cost processes 33:01 33 minutes, 1 second uh are the hygiene which you need to keep in and uh risk diversification by is is something which you need to be 33:09 33 minutes, 9 seconds consciously working upon on different markets. So how do you diversify? 33:14 33 minutes, 14 seconds Okay. Uh so like I guess the like global environment what we are focusing more on 33:22 33 minutes, 22 seconds like protecting our margins uh like if even a volume slowdown or we are prioritizing our to maintain capacity neutralization. 33:32 33 minutes, 32 seconds So I think it's a combination of both. 33:34 33 minutes, 34 seconds It's not like a single strategy. One is obviously we are looking at diversifying the market base which we have done a little bit. We have opened up three more 33:42 33 minutes, 42 seconds markets in the last quarter and that's a deliberate attempt which has been done from our end. Now when you enter into a new market obviously you need to have a 33:49 33 minutes, 49 seconds market strategy. You know you may not necessarily command the premium because the customers will want to test you and then once they test once they know what 33:58 33 minutes, 58 seconds once they understand the English you speak you understand the English they speak then possibly the relationship kind of grows. So initially maybe the 34:05 34 minutes, 5 seconds margins are little um challenged because you know you want to build the market and then slowly once you kind of establish the proof of concept then uh 34:14 34 minutes, 14 seconds the relationship becomes a little more mature and you can talk about a more long-term stable relationship with uh sustained margins with these customers. 34:23 34 minutes, 23 seconds Uh so what we are doing is diversifying the markets. We are also diversifying a product segment. So initially what was 34:31 34 minutes, 31 seconds limited to only apparel segment we are deliberately moving into automotive uh industrial yarn segments um the FR 34:41 34 minutes, 41 seconds segments so that our um there again once while the cycles are little longer because it's it's a process of 34:50 34 minutes, 50 seconds compliance and certification but once you are done and once you are once they are sure of your quality the stickiness increases. 34:58 34 minutes, 58 seconds Okay. 34:59 34 minutes, 59 seconds uh like uh is it right to say that current margin pressure is due to external factor or is like something else. 35:10 35 minutes, 10 seconds So you know any crisis is an opportunity is what we what what we believe that you know and I think obviously what you 35:18 35 minutes, 18 seconds can't control is the external environment but what you can control is the internal environment right I mean you know so obviously cost efficiencies internally whatever can be done and 35:27 35 minutes, 27 seconds never ever it is a single factor which affects your entire margin so it's a combination of both what we are doing at 35:34 35 minutes, 34 seconds our end is as I said looking at our process efficiency which can give a margin or two whether it is the people 35:42 35 minutes, 42 seconds cost or whether it is a nonvalue added non-essential segment getting automated 35:48 35 minutes, 48 seconds or through a value addition which we provide to our customers a value added product so it's a combination of both 35:57 35 minutes, 57 seconds okay sir thank you for answering your my questions that you have something 36:06 36 minutes, 6 seconds sure thank you thank Thank you. Thank you. 36:15 36 minutes, 15 seconds The next question is from the line of Harik Kumar, an individual investor. Please proceed. Good morning, sir. Am I audible, sir? 36:23 36 minutes, 23 seconds Yes. Har, you are very much audible. 36:24 36 minutes, 24 seconds Thank you for Okay. Thank you for taking my question sir. The first one is regarding our capacity utilizations like 36:31 36 minutes, 31 seconds what percentage they are and related to that our quarterly render rate it was almost reaching 1,000 crores now we are 36:39 36 minutes, 39 seconds back to 650 is it uh due to low capacity utilization or pricing has gone down 36:46 36 minutes, 46 seconds so I think you know what we have done is no our capacity utilization is roughly about 94% at this point of time now uh 36:55 36 minutes, 55 seconds see uh when the fiber when the cotton was 100,000 obviously it's a direct pass out uh uh to to the market at that point 37:05 37 minutes, 5 seconds of time possibly our quarterly turnovers were in the range of about 900 to,000 crores now the cotton prices obviously 37:12 37 minutes, 12 seconds got uh readjusted to the current of 52 53,000 so I think we have been operating in the last four uh last eight quarters 37:21 37 minutes, 21 seconds in uh in let's say 700 to 600 kind of a uh per quarter uh uh uh revenue rate and 37:30 37 minutes, 30 seconds we are maintaining that as we uh and as I said you know I mean it is a question of not chasing purely the top line it is 37:38 37 minutes, 38 seconds also about ensuring how the bottom line uh is kind of built upon in in in in near time that's the whole focus 37:48 37 minutes, 48 seconds okay and the second question sir regarding this uh raw material conversion like after this uh removal of 37:55 37 minutes, 55 seconds import duty and cotton Has it turned far sir? to product conversion differently. 38:02 38 minutes, 2 seconds No. So I think again it is what use it is going. See the knit industry the the cotton knit uh yarn which it goes it is always under pressure right. I mean if 38:10 38 minutes, 10 seconds you just compare between India and Bangladesh you know I mean India uh the Bangladesh yarns are at least 30% 38:17 38 minutes, 17 seconds cheaper if they produce 30% uh more uh expensive if they have to produce it locally and that has been their uh 38:24 38 minutes, 24 seconds grievance over a period of time. So stabilized cotton prices bring in stability in the in the yarn prices over 38:33 38 minutes, 33 seconds a period of time. But if you look at the India prices, India cotton prices that has at least gone up by around 78% in 38:41 38 minutes, 41 seconds the last 6 months. What is what what worries and what is more troublesome for the industry is the volatility in the 38:49 38 minutes, 49 seconds cotton pricing. you know if it if it is volatile one day it goes up by 2,000 other days it comes up comes down by 38:55 38 minutes, 55 seconds 2,000 that swing is what makes because you know you nobody buys the cotton for the entire uh season in one go right so 39:04 39 minutes, 4 seconds one has to kind of uh build positions as they go around so volatility hits 39:10 39 minutes, 10 seconds but the price for now has been stable so whether it has your question was whether it has affected the conversion cost or 39:17 39 minutes, 17 seconds not the conversion cost I The increase in cotton prices if you are in the in the basic hands normally gets 39:24 39 minutes, 24 seconds passed on. There is a lag for sure between uh between uh the cotton price increase and the yarn price increase but it has to kind of get passed on. 39:36 39 minutes, 36 seconds And lastly sir uh we are in a few companies to have a traceability like uh we have totally integrated like are we 39:44 39 minutes, 44 seconds not getting the same or pricing advantage sir? So I think you see one of the Europe especially. 39:51 39 minutes, 51 seconds Yes. Yes. Yes. So I think we are building it up because I think that's what I said that we have all the components. It's about just putting it 39:59 39 minutes, 59 seconds together and ensuring that we tap into the right markets who value this. Once the EU FDA comes into place, this is 40:07 40 minutes, 7 seconds going to be one of the realities which will hit the textile players in India. 40:11 40 minutes, 11 seconds You know how ready they are. you know whether it is the CPAM whether it is the um EPRS or they will want the 40:19 40 minutes, 19 seconds traceability and we are uh I mean not because that they want but because we believe in it we are making ourself 40:26 40 minutes, 26 seconds ready so that it's not about just saying that we do this how do we demonstrate it so you know that is the piece which is 40:35 40 minutes, 35 seconds being worked upon at this point of time that is showing future profits for sure I think you know I mean if you 40:42 40 minutes, 42 seconds See uh uh it does not the ESG scores are or SDG I mean whatever has been spoken 40:49 40 minutes, 49 seconds about it is not only from from the customer side even from the financial institution side uh they are uh offering 40:59 40 minutes, 59 seconds concessional uh capital access to companies which which adhere to their SDGs or you know which are there to 41:07 41 minutes, 7 seconds committed to reducing their uh footprints carbon footprints and this has even come to India. 41:14 41 minutes, 14 seconds Okay, I'll do it this time. Thank you very much for that. Thank you. 41:25 41 minutes, 25 seconds Thank you. 41:27 41 minutes, 27 seconds The next question is from the line of Deep Doshi, an individual investor. Please proceed. 41:35 41 minutes, 35 seconds Yes. Hi. Uh can I go ahead please? Hi Deep, please go ahead. 41:40 41 minutes, 40 seconds Okay. Um so with reference to the slide five of the investor presentation um the yarn business which is there so in Q3 41:49 41 minutes, 49 seconds FI26 when it comes to IBIT you have made 1 cr in that business. So just wanted to know like the yarn business contributes 41:58 41 minutes, 58 seconds majority of the revenue but the margins have remained um under pressure. So what are you doing over here when it comes to 42:05 42 minutes, 5 seconds the product mix or customer segments that can help the profits over here? 42:10 42 minutes, 10 seconds So two things I mean I think I did cover it in uh initially but I think specifically with the yarn business two things which we are doing. One is uh 42:19 42 minutes, 19 seconds working internally as to how we can reduce our costs and there are two or three very clear levers on that. one is 42:28 42 minutes, 28 seconds how do we reduce our uh energy cost because energy cost is roughly about 40% in the yan conversion you know and uh 42:36 42 minutes, 36 seconds the states in which we operate have one of the highest tariffs whether it is Rajasthan or whether it is Marchel so we 42:43 42 minutes, 43 seconds have uh I mean I mean what is in public domain is what I can share that we have already kind of tied up with for 42:50 42 minutes, 50 seconds renewable renewable energy and that should that benefit should start acrewing in from quarter 1 of next year 42:56 42 minutes, 56 seconds that is number one. Number two is on the uh cost of people you know I mean there 43:04 43 minutes, 4 seconds u we we had initiated certain changes we have kind of converted the three units into two fulfillment centers and we 43:12 43 minutes, 12 seconds expect uh at least um I mean at least 150 basis points reduction in our manpower cost as we kind of move forward. 43:25 43 minutes, 25 seconds Um okay so got it that was like really helpful. Yeah. So that that's the internal point of view. From the external side, they are obviously all 43:34 43 minutes, 34 seconds that product play, geography de-risking, how do we optimize more of uh milange capacity which became under pressure 43:41 43 minutes, 41 seconds because of Bangladesh uh uh road transport coming to an halt. That's that's the go to market study. So we are 43:50 43 minutes, 50 seconds working on both sides to see how we can best uh uplift uh the sentiment in the young business. 43:59 43 minutes, 59 seconds Okay, got it. So, um can I expect some better profitability um from Q4 onwards itself or should I some should I wait for some couple of quarters more? 44:09 44 minutes, 9 seconds So, I think the so well you what we are seeing is there is an upward trend and this trend will continue. Now obviously 44:18 44 minutes, 18 seconds it is dependent on a I mean in spite of the external conditions we have we have kind of made these uh these positive turnarounds. So they will only get 44:26 44 minutes, 26 seconds better as quarter on quarter. So it's not that I will say that it's not a hockey stick projection that you know I mean uh it will I mean right now it will 44:34 44 minutes, 34 seconds dip for a few quarters and then it will come up. You will see improvement quarter on quarter. The real benefit of it possibly we'll kind of realize in about two or three quarters from now. 44:47 44 minutes, 47 seconds Okay sir. Um thank you that was useful and just a couple of questions more. Um if I can go ahead please. Yes, please. 44:56 44 minutes, 56 seconds Okay. So, I'm just coming to the market scenario. Um, so I think that the industry is is gradually shifting towards synthetic and blended yarns, 45:05 45 minutes, 5 seconds right? So, how are we positioned to benefit from this? And um are there any plans of um capacity expansion or um 45:13 45 minutes, 13 seconds what's your strategy? Are we focusing more on the specialty on side of things? 45:19 45 minutes, 19 seconds So I think uh when you say what you mean is actually the industry is pivoting more towards the active wear segment or 45:26 45 minutes, 26 seconds the you know uh now in the synthetic there are obviously uh different segments. One is the suiting segment 45:34 45 minutes, 34 seconds which is the poly viscos suiting which goes into more of the formal wear. uh the polyester viscos knits which forms a 45:41 45 minutes, 41 seconds part of uh activeware segment and then there are you know uh then there are plays of fiber which are micro dener 45:50 45 minutes, 50 seconds which gives you a different uh different yarn and also as far as the spun uh yarn 45:57 45 minutes, 57 seconds is concerned. If you are talking about the filament yarn, currently we don't have any plan to get into that filament 46:04 46 minutes, 4 seconds yarn within the spun segment. Whatever plays are possible, we are experimenting and we are hopeful that you know we'll 46:12 46 minutes, 12 seconds be able to the capacities which we have will are good enough to capture uh the value which the market has to offer. 46:22 46 minutes, 22 seconds Okay. Um got it. And um this pun segment what you were referring to um how is the response um from the client side like 46:29 46 minutes, 29 seconds are we getting a positive feedback from them. 46:33 46 minutes, 33 seconds So it's building up you see you see it's a cycle you know I mean you you test you uh and then the whole cycle but the 46:40 46 minutes, 40 seconds there is a positive sentiment on that is all I can say. 46:45 46 minutes, 45 seconds Okay. So um got it. So can I just take one last last question when it comes to home textile business please? Yes please. 46:53 46 minutes, 53 seconds Um thank you sir. So just wanted to know more about the um competitive scenario um in the market currently. So are we 47:02 47 minutes, 2 seconds facing any pricing pressure um from countries like Bangladesh, Vietnam or Turkey? I think you've um highlighted 47:09 47 minutes, 9 seconds something about Bangladesh in the past but can you just tell me more about the competitive intensity right now and how 47:16 47 minutes, 16 seconds are we um um trying to like face this and um this one and outlook about this as well. 47:23 47 minutes, 23 seconds So okay so I'll give you a general outlook and then I'll talk specifically about success. You see the home textiles has has a varied spectrum you know I 47:32 47 minutes, 32 seconds mean there is this whole over the bed segment which is the bed sheets and everything which kind of goes around. 47:37 47 minutes, 37 seconds Then there is this whole upholstery segment which is you know more to do with the with the uh furniture the 47:45 47 minutes, 45 seconds curtains and then over the table uh kind of segment which is there. Now 47:52 47 minutes, 52 seconds the value chains in all of these three are quite uh quite different and intrinsic and it's not so Bangladesh for 48:01 48 minutes, 1 second sure is not a competitive competition as far as the home textiles is concerned because again they don't have I mean they are more onto the fashion apparel 48:10 48 minutes, 10 seconds side you know mean for which which they kind of work upon the uh competition on this is is is let's say more from China 48:19 48 minutes, 19 seconds and more from Turkey because that's where things kind of work around and also from Pakistan on the basic sheetings which are more of polyester 48:26 48 minutes, 26 seconds cotton. India has the inherent advantage of the cotton uh supply chain you know and that's one of the biggest uh 48:34 48 minutes, 34 seconds advantage almost 23% of the world cotton is is is in India you know is what we produce. So because of that inherent 48:42 48 minutes, 42 seconds advantage which India has the supply chains are not easily replicable you know I mean while uh and then coming 48:51 48 minutes, 51 seconds specifically to satage we operate in the value added design complex technical expertise uh uh required kind of a 49:01 49 minutes, 1 second segment where we have made our production facilities a little more modular to offer to our customers more 49:08 49 minutes, 8 seconds value added um services like just in time or we work with them on a TCO basis which is total 49:16 49 minutes, 16 seconds cost of ownership basis. So that segment remained protected even when the tariffs were 50%. Which only goes to so which 49:25 49 minutes, 25 seconds only goes to prove that you know there is reasonable price elasticity which we can kind of uh uh dig in as we kind of 49:34 49 minutes, 34 seconds move forward. So we will continue to operate in that segment and we will only move a little bit of uh downstream there 49:43 49 minutes, 43 seconds by offering uh a full bag in a bed uh bed in a bag solution or over the table 49:51 49 minutes, 51 seconds u uh products to the market to the customers which we have. 50:01 50 minutes, 1 second Um okay so I got it. Um and this was really helpful. And um anything about Turkey? I think you covered Bangladesh and Vietnam. Anything specific about Turkey? Um as an investor I should know. 50:13 50 minutes, 13 seconds No. So Turkey obviously has a inherent advantage because it is closer to Europe. Most of the brands are looking at on-time supplies. So in spite of 50:21 50 minutes, 21 seconds whatever cost uh they if they were to view it. So Turkey remains an uh remains a country which uh which is not again easily replaceable. 50:33 50 minutes, 33 seconds Got it. Sir, thank you. This was really helpful. Best of luck for the coming quarters. Thank you. Thank you. 50:43 50 minutes, 43 seconds Ladies and gentlemen, that was the last question for today. I now hand over the conference to management for closing comments. Over to you, sir. 50:52 50 minutes, 52 seconds Uh thank you everyone for your continued support uh in Subless Textiles. uh if there are any further questions you can reach out to us uh through our advisers 51:01 51 minutes, 1 second and we'll be happy to engage. Thank you once again. 51:06 51 minutes, 6 seconds Thank you on behalf of Satlish Textiles and Industries Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.