Any current/future new fundraising through debt or equity?

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 fa

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

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 inve

Future growth expectations in sales/revenue/volumes?

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 weavin

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

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 ₹130-15

Current/ Expected Orderbook/ Pending Orders?

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 ma

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Swaraj Suiting LtdQ1 FY25Textiles & Apparels

Swaraj Suiting Ltd Q1 FY25 Earnings Call Analysis

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

Price: ₹362P/E: 15.3Market Cap: ₹726 CrSector: Textiles & Apparels

Management growth scorecard

Revenue

Category 1

Margin

Category 2

Fundraise

Yes

Order

Yes

Capex

Yes

4 of 5 growth signals are positive — a strong management growth story.

Full analysis

Revenue guidance

Category 1

→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.

Margin guidance

Category 2

→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.

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Fundraise plans

Yes

→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.

Order book

Yes

→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.

Capex plans

Yes

→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.

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