Any current/future new fundraising through debt or equity?

The company is planning a CAPEX of approximately Rs. 180 to Rs. 190 crores over 18 to 24 months for modernization and capacity expansion. This CAPEX will lead to an increase in long-term borrowings, causing higher finance costs estimated to be around Rs. 35 crores going forward. The finance cost is expected to remain on an increasing trend due to these borrowings. No specific mention of equity fundraising was made in the call transcript. The increased debt is tied to the CAPEX plan, including investments in worsted and fabric realignment projects. The company will monitor the borrowings quarte

Any current/future capex/capital investment/strategic investment?

Banswara Syntex is planning a CAPEX investment primarily focused on worsted yarn and fabric capacity expansion, as well as mill decongestion and realignment including civil works. The estimated total CAPEX for FY '25 and FY '26 is in the range of Rs. 180 to Rs. 190 crores, to be deployed over 18 to 24 months, not all at once. This CAPEX will lead to an increase in long-term borrowings, causing a rise in finance costs, estimated to be around Rs. 35 crores going forward but may vary quarter-on-quarter. The company is also investing in modernization of existing yarn machinery to improve quality a

Future growth expectations in sales/revenue/volumes?

Yarn division is expected to improve in Q2, with further betterment in Q3 and Q4 FY25. Fabric division capacity utilization improved to 70% in Q1 FY25 and is expected to rise to 80-85% by year-end. Garment division's capacity utilization (46% in Q1) is expected to recover to 60-80% in Q3 and Q4. Simone brand aims for Rs. 25 crores sales in FY25 and plans to double sales annually, targeting Rs. 500-1000 crores in 5-6 years. Increased focus on value-added and technical textiles, including defense contracts, with expected growth in these segments. Anticipated demand revival for jackets

Future growth expectations in earnings/operating earnings/profits/EPS?

Company recognizes Q1 FY25 as the worst quarter recently but expects improvements going forward. Optimistic about demand revival particularly in jackets, uniforms, and technical textiles in upcoming quarters. Fabric segment capacity utilization is improving (70% in Q1 toward target of 80-85% by year-end). Garment segment expected to recover from 46% utilization to 60-80% by Q3/Q4. Brand Simone Federico & Figli launched with Rs. 25 crores sales target for FY25, aiming to double annually. CAPEX of Rs. 180-190 crores planned over 18-24 months to improve capacity and realign mills. Company expects

Current/ Expected Orderbook/ Pending Orders?

The finished goods inventory has slightly increased in Q1 FY25 due to orders currently in the pipeline. These pending orders are expected to be billed in subsequent periods, indicating an active orderbook. The overall inventory increase is in line with the company’s projections and planned sales. Simone brand has bookings of Rs. 25 crores already for the current financial year, reflecting confirmed orders. The company is optimistic about growth in several segments, including Technical Textiles for defense and uniform fabric orders, which support future order visibility.

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Banswara Syntex LtdQ2 FY24Textiles & Apparels

Banswara Syntex Ltd Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹138P/E: 15.8Market Cap: ₹403 CrSector: Textiles & Apparels

Management growth scorecard

Revenue

Category 4

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 4

→Yarn division is expected to improve in Q2, with further betterment in Q3 and Q4 FY25.
→Fabric division capacity utilization improved to 70% in Q1 FY25 and is expected to rise to 80-85% by year-end.
→Garment division's capacity utilization (46% in Q1) is expected to recover to 60-80% in Q3 and Q4.
→Simone brand aims for Rs. 25 crores sales in FY25 and plans to double sales annually, targeting Rs. 500-1000 crores in 5-6 years.
→Increased focus on value-added and technical textiles, including defense contracts, with expected growth in these segments.
→Anticipated demand revival for jackets and blazers driven by Indian formal wear and wedding season.
→Global demand recovery seen in Eastern Europe and Western markets beginning second half FY25.
→CAPEX of Rs. 180-190 crores planned over 18-24 months to support growth and capacity expansion.

Margin guidance

Category 3

→Company recognizes Q1 FY25 as the worst quarter recently but expects improvements going forward.
→Optimistic about demand revival particularly in jackets, uniforms, and technical textiles in upcoming quarters.
→Fabric segment capacity utilization is improving (70% in Q1 toward target of 80-85% by year-end).
→Garment segment expected to recover from 46% utilization to 60-80% by Q3/Q4.
→Brand Simone Federico & Figli launched with Rs. 25 crores sales target for FY25, aiming to double annually.
→CAPEX of Rs. 180-190 crores planned over 18-24 months to improve capacity and realign mills.
→Company expects better topline growth translating to operating profits and margins in the second half of FY25.
→Cost increase due to investments anticipated to stabilize, enabling better margins and PAT recovery.
→Overall, confident of positive earnings trajectory post Q1 FY25, driven by innovation, capacity utilization, and market recovery.

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Fundraise plans

Yes

→The company is planning a CAPEX of approximately Rs. 180 to Rs. 190 crores over 18 to 24 months for modernization and capacity expansion.
→This CAPEX will lead to an increase in long-term borrowings, causing higher finance costs estimated to be around Rs. 35 crores going forward.
→The finance cost is expected to remain on an increasing trend due to these borrowings.
→No specific mention of equity fundraising was made in the call transcript.
→The increased debt is tied to the CAPEX plan, including investments in worsted and fabric realignment projects.
→The company will monitor the borrowings quarter-on-quarter as the CAPEX progresses.

Order book

→The finished goods inventory has slightly increased in Q1 FY25 due to orders currently in the pipeline.
→These pending orders are expected to be billed in subsequent periods, indicating an active orderbook.
→The overall inventory increase is in line with the company’s projections and planned sales.
→Simone brand has bookings of Rs. 25 crores already for the current financial year, reflecting confirmed orders.
→The company is optimistic about growth in several segments, including Technical Textiles for defense and uniform fabric orders, which support future order visibility.

Capex plans

Yes

→Banswara Syntex is planning a CAPEX investment primarily focused on worsted yarn and fabric capacity expansion, as well as mill decongestion and realignment including civil works.
→The estimated total CAPEX for FY '25 and FY '26 is in the range of Rs. 180 to Rs. 190 crores, to be deployed over 18 to 24 months, not all at once.
→This CAPEX will lead to an increase in long-term borrowings, causing a rise in finance costs, estimated to be around Rs. 35 crores going forward but may vary quarter-on-quarter.
→The company is also investing in modernization of existing yarn machinery to improve quality and efficiency rather than large-scale new plant CAPEX.
→They acquired the Simone Federico & Figli brand to drive inorganic growth in the fabric segment, with sales already booked at Rs. 25 crores for the current financial year, targeting brand expansion.
→Focus remains on value-added products and innovation to improve market share and growth.

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