Sanathan Textiles (SANATHAN) investor relations material

Executive summary

• Q3 FY26 was marked by industry volatility, global trade disruptions, regulatory changes, and shifting demand, but operations remained resilient with Silvassa at optimal capacity and Punjab ramping up from 350 to 450 TPD, targeting 700 TPD by Q4 FY26.

• Margin pressures arose from U.S. tariffs, GST rate changes, and new BIS/QCO norms, but the core business remained robust and capacity utilization at Silvassa was maintained by pivoting to domestic markets.

• Recent India-U.S. tariff resolution and India-E.U. trade agreement are expected to revive export demand and open new market opportunities, supported by favorable government policies.

• Strategic priorities include disciplined capacity scaling, technical textile expansion, and strengthening the integrated yarn portfolio, with expansion of cotton division in Madhya Pradesh and new technical textile lines in Silvassa planned for Q1 FY27.

• Board approved unaudited standalone and consolidated financial results for Q3 and 9M FY26, and re-appointed Mrs. Rupal Vora as Additional Director (Non-Executive and Woman Independent Director) for three years from April 1, 2026, subject to shareholder approval.

Financial highlights

• Standalone Q3 FY26 revenue was INR 768.1 crore, stable sequentially and up 3.6% YoY; normalized EBITDA was INR 56 crore (7.3% margin), excluding a one-time gratuity liability of INR 2.6 crore.

• Standalone PAT for Q3 FY26 was INR 38.1 crore (5% margin); consolidated Q3 revenue was INR 1,078.7 crore, up 31.9% QoQ and 45.2% YoY, driven by Punjab facility ramp-up.

• Q3 FY26 consolidated EBITDA was INR 57 crore, impacted by one-time costs; normalized EBITDA was INR 59.9–60 crore (5.6% margin).

• Q3 FY26 consolidated PAT was negative at INR -4.77 crore, down from INR 34 crore YoY, with PAT margin at -0.4%.

• For 9M FY26, consolidated revenue was INR 2,642 crore (up 16.6% YoY), normalized EBITDA INR 190–192.6 crore (margin 7.2%), and PAT INR 55.8 crore (margin 2.1%).

Outlook and guidance

• Punjab facility expected to reach phase one capacity of 700 TPD by end of Q4 FY26, with full potential in Q1 FY27; phase II to increase capacity to 950 TPD.

• FY27 guidance: consolidated revenue of INR 5,700 crore with double-digit EBITDA margin.

• Q4 FY26 guidance: consolidated EBITDA of INR 90–100 crore and revenue of INR 1,200 crore.

• Technical Textile Yarn expansion at Silvassa to double capacity to 18,000 MTPA in Q1 FY27, with full revenue impact from Q2.

• Cotton yarn operations in Madhya Pradesh to commence in second half of FY28.