Sanathan Textile Q1 FY27 Results (NSE: SANATHAN)
Signal: Margin pressure
The read
Consolidated revenue surged 79% YoY on the back of the technical textiles capacity expansion, but group PAT collapsed 41% as two subsidiaries with ₹573 Cr revenue reported a combined net loss of ₹41.26 Cr, overwhelming the parent's strong standalone PAT of ₹64.95 Cr. The margin arc is contracting (EBITDA margin -120bps YoY to 8.4%), and earnings quality is impaired by subsidiary drag.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,334.74 Cr | 79.1% | 14.2% |
| EBIT | ₹76.95 Cr | 28.3% | |
| Net profit | ₹23.82 Cr | -41.1% | |
| EPS | ₹2.82 | -41.1% | |
| EBIT margin | 8.4% |
P&L walk
Revenue growth of 79% YoY was driven by the new technical textiles capacity, but consolidated PAT fell 41% as subsidiaries booked a combined loss of ₹41 Cr, dwarfing the parent's standalone profit.
Key positives
- Consolidated revenue jumped 79.1% YoY to ₹1,334.74 Cr, driven by the new technical textiles capacity (doubled from 9,000 to 18,000 MTPA).
- Standalone PAT rose 37.6% YoY to ₹64.95 Cr with EBITDA margin expanding 180bps to 13.6%, demonstrating the parent's operational strength.
- Standalone other income grew 84.7% YoY to ₹15.68 Cr, supplementing operating profit.
Key concerns
- Consolidated PAT declined 41.1% YoY to ₹23.82 Cr due to ₹41.26 Cr net loss from subsidiaries (Sanathan Polycot & Universal Texturisers), which accounted for 43% of consolidated revenue.
- Consolidated EBITDA margin contracted 120bps YoY to 8.4%, reflecting margin pressure from the loss-making subsidiaries.
- Finance cost on standalone jumped 141% YoY to ₹11.46 Cr, signalling increased debt for capex.
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