Borana Weaves Ltd Q4 FY26 Earnings Analysis

- Borana Weaves plans to double loom capacity from 1,000 to 2,000 by March 2028, increasing production volumes steadily. - By end of FY 2027, loom capacity is expected to reach 1,500, boosting fabric output. - Recent quarters showed strong sales growth: Q3 FY’26 revenue rose 42% year-on-year to INR 111.36 crores; 9-month revenue up 36% to INR 287.86 crores. - Incremental revenue from 160 new looms (Unit 4B) is projected at INR 60-75 crores annually. - Focus on value-added products and technical textiles is expected to enhance revenue quality. - Realization per square meter is improving, with INR 16+ per square meter anticipated going forward. - Export growth may shift toward Middle East and UAE markets due to EU policy changes, but domestic demand remains strong. - Emphasis on operational efficiency and renewable energy integration aims to support sustainable margin and revenue growth.

- Borana Weaves expects steady growth with capacity doubling from 1,000 to 2,000 looms by March 2028, reaching 1,500 looms by March 2027. - EBITDA margins projected to gradually increase beyond current ~24.3%, potentially reaching 25-25.5% as new units become fully operational and depreciation/interest costs stabilize. - Revenue growth driven by incremental capacity additions, with 160 looms adding ~INR60-70 crores annual revenue; overall capex for doubling capacity estimated at INR350-400 crores. - Expansion supported by internal accruals and debt, no equity dilution planned. - Margins expected to benefit from lower raw material costs due to removal of import restrictions and continued operational efficiencies. - PAT growth supported by strong volume growth, operational leverage, and expanding margins; 9M FY26 PAT rose 62% Y-o-Y. - Future product mix will maintain a 20-25% value-added product contribution, adapting to demand trends.

- Current capex of INR35 crores spent on Unit 4B for adding 160 water jet looms, part of capacity doubling plan. - Planned total capex of INR350-400 crores to double loom capacity from 1,000 to 2,000 by March 2028. - Capex split: ~INR200 crores on machinery, INR50-70 crores on working capital, plus renewable energy investments. - Renewable energy investments approx. INR125 crores (including rooftop solar and solar-wind hybrid projects), expected to save around INR18-20 crores annually in power costs. - Financing primarily through internal accruals and manageable debt; no equity dilution planned. - Minor equity investment (~INR1 crore) in Attero Recycling with no plans for other non-core investments—business focus remains synthetic fabric manufacturing. - Capacity expansion linked with renewables for cost efficiency and sustainability.

- No equity dilution is planned for funding the capacity expansion. - The estimated capex for doubling capacity (INR350-400 crores) will be funded primarily through: - Internal accruals - Debt as needed (around INR40 crores debt planned for renewable energy; similar approach expected for capex). - Current debt levels are low with INR35 crores long-term and INR25 crores short-term debt. - The company’s financial strategy emphasizes prudent capital allocation and maintaining a strong balance sheet that is nearly debt-free. - Renewable energy projects involve partial debt (~INR40 crores), rest funded through internal resources; interest cost on this debt expected to be moderate. - Overall, debt will be used carefully alongside internal funds; no fresh equity fundraising is planned at this time.

- The transcript does not explicitly mention the exact current or expected order book figures in numbers. - However, it mentions strong order books and healthy sales volumes driving revenue growth in Q3 FY '26. - The company has robust demand visibility supported by stable utilization and operational efficiency. - It indicates a positive market environment with increased acceptance of products and enhanced capacity utilization. - The doubling of capacity to 2,000 looms by March 2028 also reflects confidence in future order inflows. - The discussion alludes to steady customer demand and sustained market traction, particularly in yarn sales. - Overall, the company appears to have a healthy and growing order pipeline aligned with its capacity expansion plans.