Any current/future new fundraising through debt or equity?

No new substantial capital expenditure plans beyond the ongoing Jammu and Kashmir Greenfield project, which involves about ₹700 crore investment. The Jammu project will be financed through a mix of term loans and internal accruals. Current term loan debt is around ₹900 crore and has remained stable for 14 years despite increasing business volumes. No mention of plans for fresh equity fundraising in the transcript. Overall, the focus appears to be on utilizing internal accruals and existing debt facilities, without additional major fundraising through debt or equity in the near term.

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

Approved capital expenditure of approximately ₹740 crore for a Greenfield unit in Jammu and Kashmir. The Jammu facility will produce recycled PET chips and recycled filament yarn with a production capacity of 270 metric tons per day. Estimated completion period for the Jammu project is two years. Financing for this project will be through term loans and internal accruals. No other substantial capital expenditure plans currently apart from the Jammu project. Existing solar and wind power facilities totaling around 72 MW, with plans to add rooftop solar at Jammu and Kashmir locations to save on

Future growth expectations in sales/revenue/volumes?

RSWM Limited reported a 34% year-on-year sales growth in Q1 FY25, with sales reaching ₹1,208 crores. The company expects sustained demand for its products, showing positive revenue momentum. A major growth driver is the planned ₹740 crore Greenfield project in Jammu, focusing on recycled pet chips and filament yarn, with an expected completion in two years. The Jammu project has a turnover to investment ratio of 1.25 to 1.3x, indicating strong revenue potential. The company aims to optimize capacity utilization, with plans to add 100 tons knitting capacity by year-end and potential expansion i

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

The company anticipates sustained demand with a 34% YoY sales growth in Q1 FY25 and improved gross profit margins. EBITDA increased 2.2 times YoY, indicating operational progress, although EBITDA margins remain volatile due to global uncertainties. Management targets margin stabilization but notes challenges in synthetic segments due to raw material price volatility. Expansion plans include a ₹700+ crore Greenfield facility in Jammu producing recycled PET chips and filament yarn, expected operational in two years, aiming to boost revenue with a turnover-to-investment ratio of 1.25 to 1.3x. Imp

Current/ Expected Orderbook/ Pending Orders?

The transcript does not explicitly mention the current or expected order book or pending orders for RSWM Limited. However, it is stated that there is sustained demand for the company’s products, with sales increasing 34% year-on-year in Q1 FY25. Large global brands such as PVH and Jockey are purchasing fabric from RSWM, indicating healthy ongoing business. The company has maintained full production capacity, distinguishing itself from competitors. Bangladesh-related disruptions led to some delays, but as per management, operations and order flows are normalizing. Expansion plans, including a G

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RSWM LtdQ2 FY24Textiles & Apparels

RSWM Ltd Q2 FY24 Earnings Call Analysis

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

Price: ₹192P/E: 11.8Market Cap: ₹734 CrSector: Textiles & Apparels

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→RSWM Limited reported a 34% year-on-year sales growth in Q1 FY25, with sales reaching ₹1,208 crores.
→The company expects sustained demand for its products, showing positive revenue momentum.
→A major growth driver is the planned ₹740 crore Greenfield project in Jammu, focusing on recycled pet chips and filament yarn, with an expected completion in two years.
→The Jammu project has a turnover to investment ratio of 1.25 to 1.3x, indicating strong revenue potential.
→The company aims to optimize capacity utilization, with plans to add 100 tons knitting capacity by year-end and potential expansion in knitting after 18-24 months.
→Exports to markets like Turkey are improving, and efforts are underway to capture global brands like PVH and Jockey.
→Challenges remain in synthetic yarn due to global price volatility but cotton segment shows promise with its branded product "Kapaas."
→Overall, RSWM is positioned for growth through capacity expansion, product diversification, and market development.

Margin guidance

Category 3

→The company anticipates sustained demand with a 34% YoY sales growth in Q1 FY25 and improved gross profit margins.
→EBITDA increased 2.2 times YoY, indicating operational progress, although EBITDA margins remain volatile due to global uncertainties.
→Management targets margin stabilization but notes challenges in synthetic segments due to raw material price volatility.
→Expansion plans include a ₹700+ crore Greenfield facility in Jammu producing recycled PET chips and filament yarn, expected operational in two years, aiming to boost revenue with a turnover-to-investment ratio of 1.25 to 1.3x.
→Improved inventory management and controlling costs underpin profitability efforts.
→No immediate plans for retail or branding expansion beyond B2B yarn products.
→Government subsidies and power cost advantages from new locations could aid cost efficiency.
→Overall, focus remains on steady margin improvement and long-term value creation despite cyclical business challenges.

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Fundraise plans

Yes

→No new substantial capital expenditure plans beyond the ongoing Jammu and Kashmir Greenfield project, which involves about ₹700 crore investment.
→The Jammu project will be financed through a mix of term loans and internal accruals.
→Current term loan debt is around ₹900 crore and has remained stable for 14 years despite increasing business volumes.
→No mention of plans for fresh equity fundraising in the transcript.
→Overall, the focus appears to be on utilizing internal accruals and existing debt facilities, without additional major fundraising through debt or equity in the near term.

Order book

→The transcript does not explicitly mention the current or expected order book or pending orders for RSWM Limited.
→However, it is stated that there is sustained demand for the company’s products, with sales increasing 34% year-on-year in Q1 FY25.
→Large global brands such as PVH and Jockey are purchasing fabric from RSWM, indicating healthy ongoing business.
→The company has maintained full production capacity, distinguishing itself from competitors.
→Bangladesh-related disruptions led to some delays, but as per management, operations and order flows are normalizing.
→Expansion plans, including a Greenfield project in Jammu with an expected production capacity of 270 metric tons per day, imply future order inflow expectations.
→Overall, while specific order book numbers aren't disclosed, company commentary suggests a stable and improving order situation.

Capex plans

Yes

→Approved capital expenditure of approximately ₹740 crore for a Greenfield unit in Jammu and Kashmir.
→The Jammu facility will produce recycled PET chips and recycled filament yarn with a production capacity of 270 metric tons per day.
→Estimated completion period for the Jammu project is two years.
→Financing for this project will be through term loans and internal accruals.
→No other substantial capital expenditure plans currently apart from the Jammu project.
→Existing solar and wind power facilities totaling around 72 MW, with plans to add rooftop solar at Jammu and Kashmir locations to save on power costs.
→Sale of thermal power plant to Didwania Trading Co. for ₹48 crore plus taxes to cut costs and improve efficiency.

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