Sutlej Textiles and Industries Limited — Q4 FY26

Sutlej Textiles And Industries Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=yQzROxI28Dw Published: 7 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q4 and FI26 earnings conference call for Sublex Textiles and 0:09 9 seconds Industries Limited. As a reminder, all participant minds will be in the listen only mode and there will be an option B for you to ask questions after the 0:17 17 seconds presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. 0:27 27 seconds Please note that this conference is being recorded. I now end the conference over to Mr. Sachin Carva, Chief Financial Officer. 0:36 36 seconds Thank you and over to you sir. 0:39 39 seconds Good morning everyone and welcome to the earning conference call of surplus textile and industries limited for Q4 and the full year ended 31st March 2026. 0:49 49 seconds I will begin with a brief overview of operation and financial environment followed by our performance for the quarter and the year. The fourth quarter 0:57 57 seconds was played out against an exceptionally challenging global backdrop. FYI26 was a year marked by significant micro 1:05 1 minute, 5 seconds headwinds. We navigated through the impact of India Pakistan situation, geopolitical tensions in Middle East, disruption arising from US Iran 1:13 1 minute, 13 seconds development and the ongoing effects of global uh Bangladesh trade situations. These are not routine volatilities. 1:20 1 minute, 20 seconds These are the kind of events that test the resilience of any business. Despite all of this, I'm pleased to report that 1:27 1 minute, 27 seconds Q4 has been the best quarter of the year, both operationally and financially. These number reflect the 1:35 1 minute, 35 seconds hard work and structural changes we have embedded into our business over the past quarters. On the cost side, employee 1:42 1 minute, 42 seconds rationalization and operational cost management have contributed meaningfully to margin improvement. For you from a 1:49 1 minute, 49 seconds utilization perspective, our yarn division is operating at over 93%. Fiber and home textile continue at planned levels. We remain focused on running 1:58 1 minute, 58 seconds those capacities where we have pricing power and product differentiation rather than chasing volumes at suboptimal 2:05 2 minutes, 5 seconds returns. Talking about the quarterly financial performance, the standalone total income came at rupees 699 cr which was higher by 4% on year-on-year basis. 2:16 2 minutes, 16 seconds Gross margin was at 45% which was higher by 329 basis point on year basis. Evita 2:23 2 minutes, 23 seconds increased over 115% on year on basis and stood at 37 cr with a margin at 5.3% for 2:30 2 minutes, 30 seconds the quarter. For the full year FI26 standalone income came at rupees 2585 cr 2:37 2 minutes, 37 seconds which was lower by 3% on year on year basis. Gross margin was at 45% which was higher by 233 basis point on year basis. 2:46 2 minutes, 46 seconds Aita increased by over 25% on year basis and stood at rupees 85 cr with a margin at 3.3% for the year. This year our home digital business has turned positive. 2:58 2 minutes, 58 seconds Our debt position is within our comfort zone. With this I would now invite our full-time director and CEO Mr. Ashish 3:05 3 minutes, 5 seconds Shriast to share business and strategic update. 3:09 3 minutes, 9 seconds Uh thank you Sachin and good morning everyone. Before we come to our performance, let me set the backdrop. 3:16 3 minutes, 16 seconds Context matters in interpreting these numbers. 3:20 3 minutes, 20 seconds FI26 has been one of the most demanding years the global textile industry has faced in recent memory. The world has navigated a sequence of overlapping 3:28 3 minutes, 28 seconds shocks. the IndiaPakistan situation, escalating tensions across the Middle East, the US Iran developments, the 3:36 3 minutes, 36 seconds continuing fallout from Bangladesh, sharp currency movements and a tariff environment that has reshaped crossber textile economics almost in a real time. 3:46 3 minutes, 46 seconds Raw materials market have remained persistently volatile and global apparel demand has stayed soft as customers run 3:53 3 minutes, 53 seconds the inventory tight. Several textile players have reported margin compression, capacity rationalization and inventory write downs. India in my 4:02 4 minutes, 2 seconds opinion however sits in a relatively favored position within this dislocation. China plus one continues to play out. 4:10 4 minutes, 10 seconds The India UK FTA is being operationalized. The India EU agreement is progressing and the NTM PLI framework 4:20 4 minutes, 20 seconds PM Mitra parks provide structural tailwinds. The opportunity for Indian textile companies positioned right on 4:28 4 minutes, 28 seconds product mix, markets and cost structure has rarely been clearer. Against that backdrop, let me come directly to where 4:35 4 minutes, 35 seconds we stand. Q4 as detailed by my colleague Sachin was one of our best quarters of the year. The full year was cash 4:44 4 minutes, 44 seconds positive. Abita grew 25% year-on-year on a whole year where revenue contracted by 3%. And EITA margins expanded four-fold 4:53 4 minutes, 53 seconds within the 12 months from8% in Q1 to 5.3% in Q4. That combination 5:02 5 minutes, 2 seconds market margin expansion through a softer topline year in a environment we just we have just described is the most 5:10 5 minutes, 10 seconds important number on this call. It tells you the strategic pivot is working and it is working through design not luck. 5:18 5 minutes, 18 seconds Last quarter we said Q4 would be better than Q3. It is. Now let me tell you why this trajectory will continue. Three 5:26 5 minutes, 26 seconds three strategic levers are driving the performance. First market diversification which is now structural 5:33 5 minutes, 33 seconds not aspirational. We have opened new markets, markets like Egypt and far and far east geographies in wake of 5:41 5 minutes, 41 seconds Bangladesh. Africa and Latin America are showing healthy traction and our Southeast Asia pipeline continues to develop. Concentration risk today is 5:50 5 minutes, 50 seconds meaningfully lower than it was a year back. The India UK FDA and the progress on India EU negotiations will open up 5:58 5 minutes, 58 seconds structural new corridors for our value added yarn and home textile portfolio. We are not waiting for those benefits. 6:05 6 minutes, 5 seconds We are positioning to capture them as they flow through. Second product upgrade. Here also we have been moving 6:13 6 minutes, 13 seconds systematically from commodity to market driven. The objective stands roughly one/ird of our yan portfolio into 6:20 6 minutes, 20 seconds converting one/ird of our yarn portfolio into value added segments over the next 12 months and the contribution margin 6:27 6 minutes, 27 seconds uplift is already visible in numbers. On the fiber side, surplus green fiber, our recycled polyester and sustainable 6:36 6 minutes, 36 seconds alternative fiber business has had a breakout year operating at over 100% utilization. 6:43 6 minutes, 43 seconds It is a high qualify high quality ESG aligned platform with structural demand from global brands seeking traceable 6:51 6 minutes, 51 seconds recyclable recycled content fiber and one of our most strategic long-term value drivers. Third, and this is where 6:59 6 minutes, 59 seconds we want to spend a little more time because this is what sets up our next phase of growth, our new value drivers. 7:08 7 minutes, 8 seconds The first one being home textiles. I think from turnaround to growth engine, that's what we are aiming it to be. This 7:16 7 minutes, 16 seconds was a restructuring story last year. It is not a restructuring story anymore. 7:21 7 minutes, 21 seconds The order pipeline today sits at 180 days, the strongest visibility we have ever had. And that has come despite 7:28 7 minutes, 28 seconds global headwinds. The division swung from a negative 3.5 cr to a positive 8.4 cr at the abita level in in the last uh 7:37 7 minutes, 37 seconds financial year and our retail branda is scaling with sustained momentum. We expect home textiles to grow meaningfully faster than our 7:45 7 minutes, 45 seconds conventional business and we are positioned where it matters in design intensive technically complex products 7:53 7 minutes, 53 seconds that cannot be substituted on price alone. 7:56 7 minutes, 56 seconds Next is the platform extension into technical textiles. We continue to extend the platform into adjacencies where our fiber, yarn and process 8:05 8 minutes, 5 seconds capabilities are directly transferable into higher margin higher margin specificationdriven categories. The next step the next step in this direction is 8:14 8 minutes, 14 seconds a calibrated entry into technical textiles a high growth performance engineered vertical beginning with protective textiles. This is one of the 8:21 8 minutes, 21 seconds fastest growing subse subsegments globally driven by tightening safety regulations and rising defense modernization. The entry strategy is 8:30 8 minutes, 30 seconds deliberately capital efficient. We will leverage existing manufacturing assets and integrated infrastructure supplemented by incremental capex 8:38 8 minutes, 38 seconds aligned to specific market and product opportunities. We will share more as the initiative reach reaches the milestones 8:46 8 minutes, 46 seconds at which uh at at which a substantia some sub substantive update is meaningful. 8:53 8 minutes, 53 seconds Last but not the least I think has published its inaugural sustainability report for five stone. This is what I 9:00 9 minutes call is a good milestone for our stakeholders. This is not a compliance document. It is a structured articulation of how we intend to run 9:08 9 minutes, 8 seconds this business over the next decade across climate action, circularity, water and energy stewardship, social 9:16 9 minutes, 16 seconds impact and governance. The report establishes our baseline, sets our commitments, sets our commitments and 9:23 9 minutes, 23 seconds benchmarks us against the leading peers in our industry. Why this matters commercially? because global brands and large institutional buyers on and now 9:32 9 minutes, 32 seconds select suppliers sele now select suppliers on traceability recycle content and credible ESG disclosure 9:40 9 minutes, 40 seconds these are no longer nice to haves they are increasingly preconditions to win businesses in the markets we want to 9:46 9 minutes, 46 seconds grow into our integrated fiber to yarn to fabric platform combined with satage green fiber proposition positions us 9:55 9 minutes, 55 seconds strongly here and the sustainability report formalizes this positioning. It will shape how capital capacity and 10:02 10 minutes, 2 seconds product development decisions get made in this company going forward on FI27. We want to give you a sense of direction rather than specific numbers. 10:12 10 minutes, 12 seconds The year is yet to play out and we would rather come back to you with each quarter's evidence. FI27 is a year we 10:20 10 minutes, 20 seconds expect the company to cross the inflection point from margin recovery story to profitable growing deleveraging 10:27 10 minutes, 27 seconds businesses. We expect EITA to expand meaningfully on the FI26 base profitability to return after almost two 10:35 10 minutes, 35 seconds years of losses and debt metrics to improve material materially as cash generation strengthens. The drivers are in place. Yan margin expansion to 10:44 10 minutes, 44 seconds product mix, home textile scaling on a strong order book, Satler green fiber revamping further and continued discipline on cost and capital 10:52 10 minutes, 52 seconds allocation. Our planned capex for the year is calibrated and milestone based with every investment measured against 10:59 10 minutes, 59 seconds payback roy and strategic fit. We are not chasing growth for the sake of growth. On yan the focus remains unchanged. Preserve and expand margin 11:08 11 minutes, 8 seconds through product upgrades. not chase volume and low low margin segments on sustainability having formalized our 11:15 11 minutes, 15 seconds framework through the FI25 report. The next phase is execution recycle cotton expansion renewable 11:23 11 minutes, 23 seconds capacity scale up water and waste targets and integration of circular materials into our portfolio. This will be our competitive mode not a compliance checkbox. 11:35 11 minutes, 35 seconds Three calls we can take from this call from this call which we'll want you to take from this call. One, FI26 demonstrated that margin model works. 11:44 11 minutes, 44 seconds Eeta being up by 25% on a softer top line is a proof point. The strategic pivot is no longer a thesis. It is a 11:52 11 minutes, 52 seconds result. Number two, FI27 will be a year of inflection. direction of travel is 11:59 11 minutes, 59 seconds profitability, a bitter expansion and a clear deleveraging trajectory. We will let each quarter 12:06 12 minutes, 6 seconds speak for itself. Third, beyond the financials, the foundations of a longerterm equity story are being put in place. Sufflex green fiber is scaling. 12:15 12 minutes, 15 seconds Home textiles is growing engine. Our inaugural sustainability report formalizes the platform we are building and we continue to extend that platform 12:24 12 minutes, 24 seconds beginning with technical textiles into higher margin inversion categories. That is the direction which the company is being reshaped. We are equally conscious 12:33 12 minutes, 33 seconds of the watch areas forex hedging discipline global tariff uncertaintity and borrowing cost management. None of 12:42 12 minutes, 42 seconds none are being deferred. Each is being actively addressed. External headwinds are real and we are not dismissing them but our strategic direction is clear. 12:52 12 minutes, 52 seconds Our execution is disciplined and the structural advantages we are building will compound over time. Q4 has 13:00 13 minutes demonstrated continued momentum. FI27 will demonstrate strategic transformation. Thank you for your 13:07 13 minutes, 7 seconds continued trust and support in textile in Southwest textiles. We will now open the floor for questions. Thank you. 13:14 13 minutes, 14 seconds Thank you very much. We will now begin with the question and answer session. 13:18 13 minutes, 18 seconds Anyone who wishes to ask a question may press star and one on their telephone. 13:24 13 minutes, 24 seconds If you wish to remove yourself from the question queue, you may press R and two. 13:28 13 minutes, 28 seconds Participants are requested to use handsets while asking the question. 13:33 13 minutes, 33 seconds Ladies and gentlemen, we will wait for a moment while the question Qseles may press R and one to ask a question. 13:51 13 minutes, 51 seconds Participants you may press star and one to ask a question. 13:58 13 minutes, 58 seconds The first question is from the line of Amit Garval from Leway Investments. Please go ahead. 14:04 14 minutes, 4 seconds Hello and good morning everyone. My first question is reg uh that there has been uh news reports coming in uh uh 14:11 14 minutes, 11 seconds that yarn prices have gone up since March. So can you give uh give how much percentage uh throw some light on what 14:18 14 minutes, 18 seconds percentage has uh the yarn prices increased compared to March and how much uh bottom line uh will increase because of this yarn prices improvement. 14:30 14 minutes, 30 seconds Uh good morning Amit. Uh thank you for the question. I think uh the the increase in yarn prices is commensurate 14:38 14 minutes, 38 seconds to the increase in the raw material prices. I mean if you look at how the raw material price index is moving with 14:46 14 minutes, 46 seconds polyester moving almost by about 30% uh viscos acrylic cotton all of them are on 14:53 14 minutes, 53 seconds an upward trajectory. So at best what is happening at this point of time is the increase in yarn prices is a result is a 15:02 15 minutes, 2 seconds direct result of the raw material price increase which is currently getting passed on to the market so to say. So 15:10 15 minutes, 10 seconds what I would say is that there's no I mean there's no incremental contribution which is coming to the spinners but 15:17 15 minutes, 17 seconds their margins are being protected at this point of time. 15:22 15 minutes, 22 seconds uh but do you think that it will improve the bottom line because ultimately we are concerned about the bottom line which has been negative last two years. 15:31 15 minutes, 31 seconds That is uh that is true and as I explained that you know I mean I mean our efforts if you look at the uh we 15:38 15 minutes, 38 seconds have very clearly uh uh spoken about how the journey we have taken and how quarter on quarter we have improved and 15:46 15 minutes, 46 seconds as I said that you know for FI27 that will be the year where the real transformation benefits will uh the company will realize 15:55 15 minutes, 55 seconds and my second question is regarding the Nara brand sir usually when the brand is launched uh It's a new product the uh the growth uh perm should be more than 16:04 16 minutes, 4 seconds 20 or 30%. Because it's a new product and there's a huge market in India as well as abroad but in last four or six 16:11 16 minutes, 11 seconds quarter our uh uh top line has been uh stagnated a bit. Uh could you throw some light on that? 16:18 16 minutes, 18 seconds Sure. So I think the the strategy for our Nesta brand is is a very calibrated one. We are moving on a very I mean 16:27 16 minutes, 27 seconds working capital efficient model. It's not necessarily a complete retail story. 16:32 16 minutes, 32 seconds We don't we still have not gone into any franchise model or have opened our own stores. We are I mean it's basically we 16:40 16 minutes, 40 seconds are playing on our design strength and offering to the Indian market and working with LFS's I mean large format stores or the MBOS and that's how the 16:49 16 minutes, 49 seconds strategy will remain. We don't want to uh you know really stock up our inventory by going directly into the 16:57 16 minutes, 57 seconds retail segment as of now. As the home textile businesses as the home textile business grows, we will have a little 17:05 17 minutes, 5 seconds more uh let's say float to play around with this brand on nesta and build it accordingly. But it's exactly going as 17:14 17 minutes, 14 seconds per what our plans are. So I do understand that the brand can become bigger but owing to um the plan which we 17:22 17 minutes, 22 seconds have put into action. Uh this is in line with that and my last question regarding the 17:29 17 minutes, 29 seconds inventory losses. So usually the inventory losses happen when the prices are crashes uh prices prices are going down but for last 6 months the prices 17:37 17 minutes, 37 seconds are going on the uh upside. So how come these inventory losses are there and uh do you expect any further inventory 17:44 17 minutes, 44 seconds losses that has to be booked uh in this present year? 17:47 17 minutes, 47 seconds So uh let me just qualify this. We don't have any inventory losses as far as India operations are concerned. If you 17:55 17 minutes, 55 seconds go a little deep we had acquired a subsidiary in in US called American Silk 18:02 18 minutes, 2 seconds Mills. that operation we have kind of decided to close down or mute it down. 18:10 18 minutes, 10 seconds So the losses on the inventory side is primarily coming from our uh holding in the subsidiary which is in US and not 18:18 18 minutes, 18 seconds our India operations. Hope this clarifies. 18:22 18 minutes, 22 seconds Okay. And uh are we exporting to America? Are we substituting that product those uh products from India or we just stopped altogether uh USA market? 18:32 18 minutes, 32 seconds No. So I think the whole I mean the whole uh value prop of that unit of that American silk mills which we had kind of 18:40 18 minutes, 40 seconds created was to buy fabrics from all around the world the fabrics which India cannot supply and then work around with 18:47 18 minutes, 47 seconds the retailers. Now given the situation which has happened that the retailers you know the way uh they are sitting 18:54 18 minutes, 54 seconds with inventories what we realize is that you know it is better because those fabrics cannot be substituted out of India. they are very high quality silk 19:03 19 minutes, 3 seconds jakards coming from Japan and other southeast markets which are being uh given to the uh retailers in US. So what 19:11 19 minutes, 11 seconds we have decided is that whatever our strength from our home textiles supply 19:18 19 minutes, 18 seconds to the customer is it is going to be direct and US in home textiles still remains a very large uh export segment. 19:27 19 minutes, 27 seconds So on the overall if I have to give you a view where uh exports is roughly in the home textile 60% of our total 19:35 19 minutes, 35 seconds business is around exports and in that 60% almost 60% is US. So we are servicing directly to the customers and 19:43 19 minutes, 43 seconds not through the subsidiary which was created earlier for the landed duty paid uh 19:50 19 minutes, 50 seconds model. So uh uh so the conclusion is that uh purchase of a bag of silks has been a waste. 19:58 19 minutes, 58 seconds Well you know in the hindsight we we can either call it a waste or it's a feedback you know in terms of we at least know what we can do right next time. 20:08 20 minutes, 8 seconds Okay thank you. Thank you. That's my last question. 20:12 20 minutes, 12 seconds Thank you participants. You may press RN1 to ask question. 20:18 20 minutes, 18 seconds Next question is from the line of Pajinala from Vara Capital. Please go ahead. 20:24 20 minutes, 24 seconds Thank you. Um and congratulations on steady improvement. Um I just wanted to understand the yarn business. Uh how are 20:32 20 minutes, 32 seconds how is the profitability uh changing in terms of various type of yarn like blended versus cotton 20:41 20 minutes, 41 seconds and um what is your inventory uh storage policy in current uh environment when uh raw material prices are increasing? 20:51 20 minutes, 51 seconds That's my first question. 20:54 20 minutes, 54 seconds Sure. So I think I'll break this into two parts. uh one is about the yan uh I mean the yan business in terms of the 21:02 21 minutes, 2 seconds margins see uh uh prena thank you for the question first and uh I think the way we have uh classified our business 21:11 21 minutes, 11 seconds is that whatever we do is mostly the value added segment of poly score so it's not the polycore because we also 21:17 21 minutes, 17 seconds dye the fiber we also dye uh the yarn so to say so 21:25 21 minutes, 25 seconds in terms of profit Profitability I would say the cotton milange which which we kind of do is number one on the 21:34 21 minutes, 34 seconds profitability followed by PV diet and then the 100% cotton. So if these are 21:41 21 minutes, 41 seconds the three stacks and we also do a lot of specialized yarns which obviously is at a very uh high uh profile or let's say 21:51 21 minutes, 51 seconds at a high contribution profile. So in terms of ranking the specialized ones the cotton 21:59 21 minutes, 59 seconds the PV diet and then the 100% cotton. So that's the uh stacking order. Uh the second part is in terms of the inventory 22:08 22 minutes, 8 seconds policy which we have we maintain because on the polyester and the viscos we don't want to we are not tempted to kind of 22:16 22 minutes, 16 seconds take long positions in any of the raw materials. We are still maintaining a reasonable discipline on our inventory. 22:23 22 minutes, 23 seconds Uh we at this point of time or we maintain typically uh 30 to 45 days as 22:30 22 minutes, 30 seconds far as cotton is concerned and about 15 to uh 20 days as far as the other fibers 22:37 22 minutes, 37 seconds are concerned where the availability is never a issue. Price of course can be an issue but then it is always good to be 22:44 22 minutes, 44 seconds little prudent in terms of managing our working capital. 22:49 22 minutes, 49 seconds Understood. So a follow up on this um in blended versus cotton uh yarn you 22:55 22 minutes, 55 seconds mentioned that um uh the the profitability is right now higher in the dyed uh yarn segment. 23:05 23 minutes, 5 seconds um given our earlier margins um if we if I recall you used to be around 10% plus 23:12 23 minutes, 12 seconds EITA margin business earlier when other value added businesses were not there do you foresee that uh these kind of 23:20 23 minutes, 20 seconds margins are coming back or um we where are we uh in that recovery journey and 23:28 23 minutes, 28 seconds um generally cotton yarn margins are higher and blended went through a uh you 23:35 23 minutes, 35 seconds know profitability issue. So if you could help us understand the breakup uh you know how how much is blended yarn 23:43 23 minutes, 43 seconds for you and uh where where is the profitability and where do we reach then where do we reach in some time in 23:51 23 minutes, 51 seconds one two weeks 3 years where however your plans are so that would help us in understanding the trajectory over longer term. 23:59 23 minutes, 59 seconds So for sure so I will not be I mean uh I will not like to be speculative in terms of giving you specific numbers but I can definitely give you a direction. First 24:07 24 minutes, 7 seconds of all I'll explain you that as to where this dip is coming and why this dip is coming. Now obviously we are we are a 9 24:16 24 minutes, 16 seconds decade old company right and which have been set up. Now cotton the uh the whole cotton uh yarn business 100% raw cotton 24:24 24 minutes, 24 seconds yarn business uh there are new generation of machines which are more power efficient and obviously uh our 24:31 24 minutes, 31 seconds entry into renewable energy is also a little late. So obviously there we stand at a disadvantage both in terms of the 24:38 24 minutes, 38 seconds production and both in and the in terms of the cost to produce those yarns. We are correcting that we are getting into renewables and if you go through our 24:47 24 minutes, 47 seconds sustainability report we have kind of very clearly given a path as to currently from 11% of renewable how it 24:55 24 minutes, 55 seconds will go to about 40%. So which will mean obviously that the the power cost which is roughly about 50% in the yarn cost 25:03 25 minutes, 3 seconds manufacturing is going to get calibrated uh working around. The other is we have also said that we want to replace you 25:11 25 minutes, 11 seconds know almost 30 to 35% of our products into more value added products and our entries into segments like technical 25:19 25 minutes, 19 seconds textiles or industrial yarns there uh that is more suited for our kind of working and the margins are much much 25:28 25 minutes, 28 seconds higher. So I would say that we are on that recovery margin journey. 25:36 25 minutes, 36 seconds uh when we should when we will hit a double digit. Well, it will all depend upon how the markets behave, how the raw material price behaves. It may be not 25:44 25 minutes, 44 seconds right to speculate on that. But year on year, we are looking at uh a 25:51 25 minutes, 51 seconds reasonable bump in our uh EITA margin or the operating profit. 25:57 25 minutes, 57 seconds Understood sir. So uh my second question is on technical textiles. Um here you are planning to be in yarn and fiber uh 26:08 26 minutes, 8 seconds part of the value chain or um you liking wanting to move uh forward integration into fabric and garmenting as well. So just wanted to understand. 26:17 26 minutes, 17 seconds Sure. Sure. So I think if you look at Satlage you know I mean we are a integrated play. It's just that our inte 26:24 26 minutes, 24 seconds I mean our processing is is based out of uh the processing for home textiles there we have a capacity of almost about 26:33 26 minutes, 33 seconds 2 million mters so to say. So we already have the ecosystem as mentioned in the in the specific note 26:42 26 minutes, 42 seconds on technical textile which was uploaded yesterday. We are looking at adding specific equipments but our processing 26:50 26 minutes, 50 seconds capacity already exists. We are just supplementing some of it and we are not looking we are going to look at yarn 26:57 26 minutes, 57 seconds fiber in the technical textile space. We are also looking at fabrics and if possible you know looking at a full 27:05 27 minutes, 5 seconds solution to our customers in times to come. So see this is a this is we have adopted a crawl walk run kind of an 27:12 27 minutes, 12 seconds approach here. So we want to and uh since we understand this landscape uh well we are we are deliberate about our strategy in terms of how we move around. 27:24 27 minutes, 24 seconds It will all depend upon what market uh segments which we are kind of wanting to 27:31 27 minutes, 31 seconds address and what are the needs at the end. Whatever we we intend to be a solution provider to our customers and 27:38 27 minutes, 38 seconds to the markets and whatever is required for them is what we are going to uh initiate our journey on that course. 27:46 27 minutes, 46 seconds And so my last question is on demand. Um do you see uh these improvements panning out even if the demand is subdued 27:54 27 minutes, 54 seconds because of the strategy change that you're looking forward towards value added yan or it will still be dependent on uh strong improvement in demand to 28:04 28 minutes, 4 seconds extent I mean most of these products in the value added segment are are not I mean there is already a demand it's a 28:13 28 minutes, 13 seconds question whether we can produce it right and to the specifications of what the markets are looking at the challenge is 28:20 28 minutes, 20 seconds ensuring that the product integrity is not compromised and we are continuously producing a consistent product which is 28:29 28 minutes, 29 seconds required for the market. So we don't see and since we are just entering into we don't see a demand per se a reason a big 28:37 28 minutes, 37 seconds challenge we already have uh proof of concepts in this we are looking at some technical adjustments in our entire 28:45 28 minutes, 45 seconds process to ensure that we are aligned to the market needs okay and any capex commitment for the year any number that you would want to 28:54 28 minutes, 54 seconds highlight well as I said that you know I mean we have a internal plan but our capex plan for the year is very much milestone 29:03 29 minutes, 3 seconds driven you know so I can what I can tell you is um I mean last year uh as per our 29:10 29 minutes, 10 seconds uh numbers we've done roughly about 70 crores which has kind of gone in that will give the results uh in the coming 29:18 29 minutes, 18 seconds year this year what we have said is that uh I mean our budgets are obviously 29:25 29 minutes, 25 seconds higher but it is all going to depend upon so it's a very milestone based you know I mean on quarter on quarter based on what numbers are coming in we are 29:34 29 minutes, 34 seconds going to trigger those capexes but we have a reasonable capex plan but at this point of time just talking about it uh 29:41 29 minutes, 41 seconds maybe a quarter or two quarters later we'll be coming out with more definite numbers sure sir thank you and all the best 29:48 29 minutes, 48 seconds thank you thank you participants you may press star one to ask the question. 29:59 29 minutes, 59 seconds Next question is from the line of Rishab from family office. Please go ahead. 30:06 30 minutes, 6 seconds Hello. Uh so thank you for the opportunity. So sir uh I have I heard a discussion about KAN segment but uh I 30:14 30 minutes, 14 seconds just wanted to have some more clarity because uh our utilization has been really strong between 85 to 89% 30:22 30 minutes, 22 seconds throughout the years but our margins are still under pressure and looking at the global situation where cotton prices 30:29 30 minutes, 29 seconds have been pretty volatile and the demand from key markets like China and Europe has been very uneven. So uh in the 30:36 30 minutes, 36 seconds backdrop what are the key steps are we taking to improve the margins and which will be in a more sustainable way 30:44 30 minutes, 44 seconds instead of uh like cost control or something like that if you can talk something about that. 30:49 30 minutes, 49 seconds So I mean just to correct our yan segment capacity utilization is at 93%. 30:54 30 minutes, 54 seconds But percentage of effective spindle utilization is at about 89%. Now what it means is that what we have deliberately 31:02 31 minutes, 2 seconds decided is as I said that you know we are not chasing the quantity we are change we are chasing the quality. So 31:09 31 minutes, 9 seconds when we chase the quality it obviously means that we are wanting to focus on the value added products. The challenge on the value added products is that you 31:17 31 minutes, 17 seconds know it has to go through a cycle. What you do is initially a sampling lot or initially a test order and then it is 31:24 31 minutes, 24 seconds tested. So the whole feedback loop is anything between 6 to 9 months. So whatever we have kind of undertaken in 31:33 31 minutes, 33 seconds the previous year, we will see those results falling in place even for the coming year and that's where we believe we are wanting to do. So what we have 31:41 31 minutes, 41 seconds very clearly said is that we have identified our hero products and we have also identified our lagards and on the 31:49 31 minutes, 49 seconds lagards we are saying that at what point of time we say stop rather than continuing with them and keep focusing 31:56 31 minutes, 56 seconds on building the hero product categories which we have identified. That's the overall strategy. 32:03 32 minutes, 3 seconds Correct. Understood sir. So basically you'll be focusing more on the hero products and the value added products which you are mentioning. Correct. 32:09 32 minutes, 9 seconds Yeah. Yes. And uh so on the home textile side our revenue was around 45 crores 32:16 32 minutes, 16 seconds and uh our losses have reduced sharply from I guess 9cr to 1 cr this year. So uh which I feel our operating leverage 32:25 32 minutes, 25 seconds is starting coming in and also on the global level also I feel demand is improving uh and what's your view 32:32 32 minutes, 32 seconds because I feel in the last three to four quarters US was majorly dto restocking their inventory but now after the fair 32:41 32 minutes, 41 seconds uh clarity on the tariff side now I feel inquiries and orders would have started 32:48 32 minutes, 48 seconds flowing in and at the same time we are targeting around 20% if I'm not wrong for the uh revenue in this segment. So 32:56 32 minutes, 56 seconds uh what do you uh any commentary on this side? 33:00 33 minutes Sure. So I think uh you know if you look at the home textile segment I mean there are different u categories there. There 33:07 33 minutes, 7 seconds is you know top of bed which is where the bed sheet comes into play. The uh uh 33:14 33 minutes, 14 seconds the uh the uh the tapestry and the curtain where we all kind of operate and 33:22 33 minutes, 22 seconds as we had kind of said and I want to repeat that we expect home textiles to grow meaningfully faster and that is 33:30 33 minutes, 30 seconds because we are positioned a little differently. We are positioned in a design intensive technically complex 33:37 33 minutes, 37 seconds product categories which are not easy to replicate and that is the whole the whole reason why in spite of the tariffs 33:45 33 minutes, 45 seconds our business grew is because of that because the replacement of those products are not easy. Uh our overall 33:54 33 minutes, 54 seconds turnaround in in I mean at the level from a negative 3.5 cr we have kind of moved to 8.4 4K cr of ITA. You know 34:03 34 minutes, 3 seconds that's the that's the story on the uh home textile and we are very confident that we'll be able 34:10 34 minutes, 10 seconds to at least double it or more in the coming year based on the strong order book position which we have and also the 34:19 34 minutes, 19 seconds commitments which we have in place from our uh uh strategic customers. 34:26 34 minutes, 26 seconds Right. So uh is is it fair to understand in the next two to two years maybe uh on AITA level it should be around 18 to 20 34:35 34 minutes, 35 seconds CR I think I mean I again don't want to put a number if if I am right if if things 34:42 34 minutes, 42 seconds go the way we have planned you may see it in this year itself okay understood sir understood I don't want you to put in a position no no 34:50 34 minutes, 50 seconds worries and so also uh on the technical textile which I've been uh doing Well for us. So in those products also what 34:59 34 minutes, 59 seconds margins are we expecting compared to our current business? 35:03 35 minutes, 3 seconds So you know typically in a technical textiles on the protective textiles the margin ranges from anything from 12% to 15%. You know depending on the product 35:10 35 minutes, 10 seconds category um what kind of segments you are entering whether it is inherent whether it is treated. So there are a lot of complexities which we'll work 35:19 35 minutes, 19 seconds around but finally the margin profile there is is is much better and more importantly much sustained over a period of time. So that's the segment which we are wanting to target. 35:28 35 minutes, 28 seconds Correct. And so any specific industry are we targeting like automative healthcare or infrastructure wherein 35:35 35 minutes, 35 seconds this fabric will be used any specific uh sector are we targeting? So I think you know I mean for a I mean protective 35:43 35 minutes, 43 seconds textiles while obviously the application is I mean you know if you are going to look at the inherent FR or the treated FR the industries which come into mind 35:52 35 minutes, 52 seconds is basically the uh oil and gas the um uh the steel industry the so these are 36:01 36 minutes, 1 second specific industries which kind of come into place but the application is much much larger so to say and what we believe is that because of the recent 36:09 36 minutes, 9 seconds developments which have happened where obviously the world is going after the oil and there is so much of damage which has been kind of created. Uh there is 36:16 36 minutes, 16 seconds going to be a resurgence of demand in the segment as we move forward. If you are able to put our house in order and 36:23 36 minutes, 23 seconds uh deliver the products which uh we uh which we uh which we and Mach to uh service 36:32 36 minutes, 32 seconds correct correct uh fair thank you for the brief uh discussion and the answers uh if I have any other 36:41 36 minutes, 41 seconds questions I'll join back but that's it for now. Thank you and all the best for the Thank you. Thank you. 36:50 36 minutes, 50 seconds Participants you may press star and one to answer question. 37:02 37 minutes, 2 seconds Ladies and gentlemen, you remember one to ask a question. 37:15 37 minutes, 15 seconds As there are no further questions, I'll now hand the conference over to the management for closing comments. Well, uh thank you everyone for joining. 37:24 37 minutes, 24 seconds Hope you found the interaction insightful. We look forward to uh get engaging with you in uh coming times in a more intense way. Thank you so much. 37:34 37 minutes, 34 seconds Thank you very much. On behalf of Satresh Techiles Industries Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.