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Banswara SyntexQ4 FY23

Banswara Syntex Q4 FY23 Earnings Call Analysis

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

Price: ₹108P/E: 9.2Market Cap: ₹386 CrSector: Textiles & Apparels

Management growth scorecard

Revenue

Category 3

Margin

Category 4

Fundraise

Yes

Order

No

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3
  • Targeting revenues between Rs. 1,550 crores and Rs. 1,700 crores for FY24, with optimism to possibly exceed this range.
  • Expect 8% to 12% revenue growth in the yarn division by FY24, focusing on southern India markets.
  • Fabric division aims for 11% to 14% revenue growth by FY24, supported by new premium products and an acquired Italian brand.
  • Garment division witnessed an 85% growth in FY23; exports growing faster than domestic sales; confident in sustaining momentum.
  • Long-term vision to achieve around Rs. 1,000 crores revenue from each segment (yarn, fabric, garment) in 2-3 years, pending further updates.
  • CAPEX of Rs. 80 crores planned for FY24 to boost capacity and efficiency, with debt raised to fund expansion.
  • Margins may soften slightly due to headwinds, but EBITDA levels expected to be maintained with higher turnover.
  • Confident about continued growth driven by product diversification, brand acquisitions, and expanding export markets.

See what Banswara Syntex management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes
  • For FY24, Banswara Syntex plans a CAPEX of around Rs. 80 crores.
  • The company will be raising debt to fund the CAPEX planned for the year.
  • No specific mention of any equity fundraising in the provided transcript.
  • The CFO prefers to provide more details in subsequent quarters if there are any changes.
  • Longer-term fundraising plans beyond FY24 are not commented on currently.
  • Total planned CAPEX for FY24 across divisions is about Rs. 145 crores, indicating potential future capital requirements.
  • Debt raising is confirmed, but specifics on quantum or terms are yet to be disclosed.

See what Banswara Syntex management said on order book — free account, 30 seconds.

Capex plans

Yes
  • FY24 CAPEX planned: Rs. 80 crores (Yarn Rs. 40 crores, Fabric Rs. 12 crores, Garment Rs. 28 crores).
  • Total CAPEX for FY24 expected around Rs. 120 to Rs. 150 crores.
  • Rs. 54 crores invested in power generation setup to mitigate power procurement uncertainty.
  • Prior investments: Rs. 97 crores CAPEX in FY23 versus Rs. 22 crores in FY22.
  • Strategic focus on manufacturing expertise in suits and trousers, including made-to-measure capacity.
  • New product development center being set up in Daman to support growth.
  • Exploring capacity expansion in southern India for knitting and weaving yarn demand.
  • Future CAPEX beyond FY24 not finalized; CFO and leadership to decide based on returns.
  • Debt raising planned to fund CAPEX.
  • Continuous modernization and efficiency improvements planned, including K3 plus garment division investments.

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Margin guidance

Category 4
  • Revenue guidance for FY24 is projected between Rs. 1,550 crores to Rs. 1,700 crores, with confidence in reaching the upper end.
  • Expectation of EBITDA margins to soften slightly due to headwinds, but total EBITDA levels are targeted to be maintained or grow, supported by higher turnover.
  • The first quarter of FY24 is anticipated to be muted, with improvement expected in subsequent quarters driven by momentum and brand development.
  • Long-term vision includes achieving Rs. 1,000 crores revenue from each business division (yarn, fabric, garment) within 2-3 years.
  • EPS for FY23 was Rs. 32.6; future EPS growth is tied to revenue growth and managing margin pressures effectively.
  • Overall bullish outlook on growth, leveraging acquisitions (e.g., Italian brand) and expansion strategies, including export market focus and capacity utilization improvement.

Order book

No
The transcript does not explicitly mention the current or expected order book or pending orders in specific figures. However, relevant points related to business prospects and order status include: - Banswara Brands Private Limited, the subsidiary for online branding, is in a slow and steady startup phase with no dramatic progress yet. - The joint venture with TESCA in the automotive part has shown improved profitability and a good future outlook. - The company expects a turnover between Rs. 1,600 to Rs. 1,700 crores in FY24, indicating confidence in demand and order flow. - The garment export orders have increased significantly, driven by large orders from international brands like Apex. - The first quarter of FY24 is expected to be muted due to challenging global conditions, but momentum is anticipated from Q2 onwards. - Expansion activities such as South expansion and CAPEX suggest an intent to meet growing order demands.

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