Future growth expectations in sales/revenue/volumes?

Textile sector expected to grow exponentially in the second half of FY24, driven by changing consumer preferences, government initiatives, technological advancements, and global trends. Increased export opportunities due to Make in India and Atmanirbhar Bharat initiatives, along with benefits from recent FTAs like with the UK. Focus on value-added and sustainable products (e.g., cotton, linen, recycled polyester) to drive growth. Export order booking for Q4 FY24 expected to be good; Q3 remains similar to Q2 levels. Knits segment running at 85% capacity with strong order inflows from brands lik

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

Management expects exponential growth in the textile sector in the second half of FY24, driven by changing consumer preferences, government initiatives, technological advancements, and global trends. Export order booking for Q4FY24 is anticipated to be good, while Q3FY24 is expected to be similar to Q2FY24. Domestic and international markets are showing signs of recovery with better dispatches expected in November and December due to festive and winter seasons. EBITDA margins in the export segment are currently under pressure but might improve with better order booking in coming quarters. The

Current/ Expected Orderbook/ Pending Orders?

Export order booking for Q4 FY24 is expected to be good. Export order booking for Q3 FY24 is expected to remain more or less the same as Q2 FY24. Domestic market shows strong demand with strict delivery schedules from Indian brands. Orders from international brands are gradually increasing as inventory levels normalize. Regular monthly orders received from Benetton (25-30 metric tons). Significant order of 10 metric tons received from Puma, Adidas nomination is in process. October month order/demand was not very good but November and December are expected to see improvement due to festive and

Any current/future new fundraising through debt or equity?

No new projects or capacity expansions are currently planned, except for some selective modernization CapEx on a case-to-case basis. The company has deferred new initiatives and will be selective about expansion, focusing on value and timing that support long-term benefits. The net debt is around Rs 600 crore with a cost of borrowing around 7% after government incentives. No mention of any immediate new fundraising through either debt or equity in the current quarter or near future. The company aims to strengthen financial stability but is cautious about raising new funds, indicating n

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

There are no major new projects currently in the pipeline; expansion plans have been deferred for some time. Only modernization CapEx will be pursued on a case-to-case or plant-to-plant basis. The company will be selective and take necessary steps at the right time and value to aid long-term growth. Focus remains on improving financial stability and expanding the product range through efficient methods. No significant large-scale capital investments planned for FY24 besides selective modernization or upgrade projects.

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RSWM LtdQ3 FY23Textiles & Apparels

RSWM Ltd Q3 FY23 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 4

Margin

Category 3

Fundraise

Order

Capex

0 of 5 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 4

→Textile sector expected to grow exponentially in the second half of FY24, driven by changing consumer preferences, government initiatives, technological advancements, and global trends.
→Increased export opportunities due to Make in India and Atmanirbhar Bharat initiatives, along with benefits from recent FTAs like with the UK.
→Focus on value-added and sustainable products (e.g., cotton, linen, recycled polyester) to drive growth.
→Export order booking for Q4 FY24 expected to be good; Q3 remains similar to Q2 levels.
→Knits segment running at 85% capacity with strong order inflows from brands like Benetton, Puma, Adidas.
→Utilization at optimum level, with yarn and denim plants at 100%.
→Capacity expansions cautious and selective, with modernization CAPEX only as required.
→Overall sales growth anticipated, with sequentially better performance expected in H2 FY24 compared to H1.

Margin guidance

Category 3

→Management expects exponential growth in the textile sector in the second half of FY24, driven by changing consumer preferences, government initiatives, technological advancements, and global trends.
→Export order booking for Q4FY24 is anticipated to be good, while Q3FY24 is expected to be similar to Q2FY24.
→Domestic and international markets are showing signs of recovery with better dispatches expected in November and December due to festive and winter seasons.
→EBITDA margins in the export segment are currently under pressure but might improve with better order booking in coming quarters.
→The company continues to focus on value-added products and sustainable textiles, aiming for good growth in H2FY24.
→Capacity utilization is high (85%-100%) across segments; however, pricing pressures limit margin improvement.
→Long-term outlook remains intact with high growth visibility despite current headwinds.
→Management remains cautious on CapEx, focusing only on selective modernization projects.

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Fundraise plans

→No new projects or capacity expansions are currently planned, except for some selective modernization CapEx on a case-to-case basis.
→The company has deferred new initiatives and will be selective about expansion, focusing on value and timing that support long-term benefits.
→The net debt is around Rs 600 crore with a cost of borrowing around 7% after government incentives.
→No mention of any immediate new fundraising through either debt or equity in the current quarter or near future.
→The company aims to strengthen financial stability but is cautious about raising new funds, indicating no fresh debt/equity raise planned imminently.

Order book

→Export order booking for Q4 FY24 is expected to be good.
→Export order booking for Q3 FY24 is expected to remain more or less the same as Q2 FY24.
→Domestic market shows strong demand with strict delivery schedules from Indian brands.
→Orders from international brands are gradually increasing as inventory levels normalize.
→Regular monthly orders received from Benetton (25-30 metric tons).
→Significant order of 10 metric tons received from Puma, Adidas nomination is in process.
→October month order/demand was not very good but November and December are expected to see improvement due to festive and winter seasons.
→Plant utilization is at optimum/full capacity, indicating stable production levels.
→Business is B2B; however, sluggish demand is impacting value addition and margin improvement.

Capex plans

→There are no major new projects currently in the pipeline; expansion plans have been deferred for some time.
→Only modernization CapEx will be pursued on a case-to-case or plant-to-plant basis.
→The company will be selective and take necessary steps at the right time and value to aid long-term growth.
→Focus remains on improving financial stability and expanding the product range through efficient methods.
→No significant large-scale capital investments planned for FY24 besides selective modernization or upgrade projects.

How does RSWM Ltd rank vs peers in Textiles & Apparels?

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1RSWM Ltd

Rev 4Mar 3

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