Swaraj Suiting Ltd

- Swaraj Suiting Limited is planning a CapEx investment around ₹300 crores, which includes working capital. - They are targeting about ₹250 crores of this CapEx funding through bank debt. - The company has a working capital limit sanctioned by the bank of ₹80 crores, with 25% margin from their side (~₹110-120 crores total). - No explicit mention of any upcoming equity fundraising was made during the call. - The company plans to utilize subsidies (₹130-150 crores estimated) which will help in future CapEx and reduce financial costs. - They appear comfortable managing working capital with existing credit facilities and subsidies. - Current indications point mainly towards debt funding for expansion with available bank credit and subsidy inflows supporting this.

- FY'24 CapEx: Commencement of all planned CapEx with total investment aimed to be completed this year. - Total CapEx investment is around ₹300 crores, inclusive of working capital; bank debt planned around ₹250 crores. - Capacity expansion for spinning, weaving (denim and non-denim) to be completed by June/October 2024. - Future CapEx supported by expected subsidy inflows (capital subsidy, power subsidy, interest subsidy) estimated around ₹130-150 crores distributed over seven years. - No new expansion plans disclosed beyond current phase; management will update investors if plans arise. - Strategic investments include backward integration into spinning and weaving to reduce outsourcing and improve gross margins. - Adoption of advanced machinery and technologies reduces wastage and utility costs. - Implementation of SAP S/4 HANA cloud ERP for operational efficiency and cyber security. - Focus on sustainability, certifications (ISO 9000, 45000, 14000, SA8000) and improving export brands portfolio as strategic initiatives.

- Swaraj Suiting Limited aims to double its revenue with the ongoing capacity expansion, targeting ₹650 to ₹700 crores in FY25. - Current existing capacity operates at 100%, generating ₹350 to ₹380 crores; additional capacity is expected to generate ₹250 to ₹300 crores. - Orders have doubled compared to last year, with a 2-month order book of approximately 35 lakh meters, indicating strong demand. - The company is focusing on growing branded and export segments, targeting 30% to 35% revenue from brands in 3 years while reducing reliance on traders. - Backward integration into spinning and weaving is expected to reduce outsourcing costs and improve gross margins. - Conservatively, revenue growth is underpinned by a stable government environment and raw material price fluctuation mitigation through subsidies and incentives. - Production capacity for denim and non-denim to achieve 60%-70% utilization in the current year post-expansion.

- Swaraj Suiting Limited aims to double its revenue in the near future driven by capacity expansions in both denim and non-denim divisions, targeting ₹650-700 crores revenue for FY25. - PAT margins are conservatively guided to increase from around 5.7% to about 6%, excluding subsidies, reflecting cautious optimism amid raw material price volatility. - EBITDA margins in H2 FY24 were around 13.5% and considered sustainable due to cost-saving initiatives and subsidies like power and capital subsidies not yet accounted for in margins. - The company expects to receive substantial subsidies totaling ₹130-150 crores across seven years, contributing to margin stability. - Backward integration into spinning and weaving is expected to improve gross margins and reduce job work costs. - Peak depreciation post-expansion is estimated at ₹23-24 crores. - Overall, earnings growth is expected to be steady but conservatively guided to mitigate risks from raw material price fluctuations and macroeconomic factors.

- Current order book is about 35 lakh metres, which has approximately doubled compared to last year when it was around 17-20 lakh metres. - The company already has a good order book for the near term, supporting their revenue growth targets. - Orders are confirmed through strong supply chains in India and Bangladesh, including tie-ups with major brands like Reliance Trends. - The confident order book enables investment in expansion with an expected doubling of revenue. - The company shows optimism about achieving conservative revenue and PAT targets despite fluctuating raw material prices and macro risks.