Sanathan Textiles (SANATHAN) Q3 25/26 earnings summary

Executive summary

• Q3 FY 2026 was marked by industry volatility, including global trade disruptions, regulatory changes, and shifting demand, but operations remained resilient due to an integrated business model and agile execution.

• Silvassa plant operated at optimal capacity, while Punjab facility ramped up from 350 to 450 TPD, targeting 700 TPD by Q4 FY26.

• Demand was impacted by elevated U.S. tariffs and GST rate changes, leading to reduced export orders and temporary inventory buildup, but capacity utilization at Silvassa was maintained by pivoting to domestic markets.

• Expansion of cotton division in Madhya Pradesh and new technical textile lines in Silvassa planned for Q1 FY27 to enhance manufacturing base and profitability.

• Benefiting from new trade agreements with the EU and US, and government focus on man-made fibers.

Financial highlights

• Q3 FY26 consolidated revenue rose to INR 1,078.7 crore, up 31.9% QoQ and 45.2% YoY, driven by Punjab facility ramp-up; normalized consolidated EBITDA was INR 59.9 crore (5.6% margin).

• Standalone Q3 FY26 revenue was INR 768.1 crore, with PAT at INR 38.1 crore (5% margin).

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

• For the nine months ended December 31, 2025, consolidated revenue was INR 2,642 crore (up 16.6% YoY), normalized EBITDA INR 192.6 crore, and PAT INR 55.8 crore.

• One-time costs in Q3 included INR 2.7 crore for labor code-linked gratuity and INR 3.5 crore for Punjab capacity scale-up.

Outlook and guidance

• Punjab facility expected to reach phase one capacity of 700 TPD by end of Q4 FY26, with 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 project in Madhya Pradesh to be commissioned in the second half of FY28.