Banswara Syntex Ltd - May 2025 Earnings Call Transcript Analysis

May 22, 2025 · 5 min read

Earnings Call Transcript Analysis Report #

Total Income: INR 1,307.5 crores (+2% YoY).
- Quote: “For FY ‘25, our total increase in income was 2% year-on-year, and we touched a turnover of INR1,307.5 crores.”
Gross Margin: 58.4%.
- Quote: “We continue to enjoy a good industry gross margin. And in FY ‘25, it stood at 58.4%.”
EBITDA: INR 117.2 crores (-2.8% YoY).
EBITDA Margin: 9%.
- Quote: “Our EBITDA stood at INR117.2 crores, which was a decline of 2.8% from last year, and our EBITDA margin was 9%.”
Profit After Tax (PAT): INR 21.4 crores.
- Quote: “We reported a profit after tax of INR21.4 crores for this financial year.”
Net Debt: Increased by INR 109.5 crores from INR 346.7 crores in FY24 to INR 456.2 crores in FY25.
- Quote: “The net debt has increased by about INR100 crores from INR346 crores to INR456 crores… (Wrongly said, this should be read as, The net debt has increased by INR 109.5 crores from INR 346.7 crores in FY24 to INR 456.2 crores in FY25).”
Debt-Equity Ratio: 0.81 as on FY ‘25.

Total Income: INR 346.6 crores (-1.6% YoY).
- Quote: “For our Q4 performance, our total income saw a marginal decline of 1.6% on a year-on-year basis to INR346.6 crores.”
EBITDA: INR 31.5 crores.
EBITDA Margin: 9.1%.
- Quote: “Our EBITDA stood at INR31.5 crores in quarter 4 with a margin of 9.1%.”
Profit After Tax (PAT): INR 5.1 crores (-38.4% YoY from INR 8.3 crores in Q4 FY24).
- Quote: “Consequently, our profit after tax declined to INR5.1 crores for Q4FY ‘25, a decline of 38.4% from Q4FY'24, where PAT was INR8.3 crores.”
Reasons for PAT decline: Increased finance costs, certain exceptional items (one-off provisions including INR 1.6 crores for Banswara Brand Private Limited, ECL provisions, higher stores consumption).
- Quote: “This was mainly impacted by increase in our finance costs and certain exceptional items, as I mentioned earlier.”
- Quote (Kavita Gandhi): “So we had to take a INR1.6 crores as a provision on that. So this is a onetime kind of a provision and certain other, as per the accounting standards on some aging and all that things, you have to make some expected credit loss and all that.”

Total Turnover Target: INR 1,550 crores (range INR 1,250 crores to INR 1,550 crores).
- Quote: “I think our targets are to be at least at INR1,550 crores in the FY ‘25- ‘26.”
EBITDA Margin Target: 12%.
- Quote: “So our target is to achieve about a 12% EBITDA and INR 1,550 crores in the next financial year.”
Fabric Division Revenue Target: INR 650 crores.
Yarn Division Revenue Target: INR 550 crores.
- Quote: “Next year, our targets are about INR650 crores. And in the Yarn, we are expecting about INR550 crores.”
Garment Division Revenue Target: ~INR 350 crores, EBITDA margin 7-9%.
- Quote: “And we expect that the turnover next year should be around INR350 crores.”
Brand Business Sales Target (Simone Federico & Figli): INR 50 crores.
- Quote: “Last year, we did only a sale of about INR11.4 crores in this brand. But this year, we are targeting to do INR50 crores.”
Brand Business Sales Target (OneMile): ~INR 2-3 crores.

Fabric Division: Revenue grew 19% YoY in FY25 to INR 540.5 crores. Q4 FY25 revenue up 10% YoY to INR 144.5 crores. Capacity utilization improved to 77% in FY25 and 79% for Q4FY25.
- Quote: “The revenue grew 19% in FY ‘25 compared to FY ‘24, and the revenue reached INR540.5 crores in the Fabric business alone.”

Yarn Division: Revenue dropped ~10% YoY in FY25 due to modernization and labor shortages, higher internal consumption.
- Quote: “The yarn division revenues had a drop of about 10% compared to FY ‘24.”
Garment Division: Revenue declined 3% YoY in FY25 to INR 275.4 crores, incurred a loss due to structural changes (Surat SEZ closure, shift to DTA) and associated costs.
- Quote: “We saw a revenue decline of 3% year-on-year to INR275.4 crores with the additional costs of the shutdown and change into a DTA division, the margin was also affected, and we did have a loss in the Garment business…”
Overall PAT: Declined in Q4 FY25 and FY25 (EBITDA down YoY for FY25).

India-U.K. FTA: Expected to eliminate tariffs, create a level playing field, and provide a 12% duty advantage for India. Seen as a major tailwind.
- Quote: “This is a major step forward for the industry as it aims to eliminate tariffs and create a level playing field for Indian exporters…”
Shift of Garment Unit from SEZ to DTA: Done for incentives (3-4% additional) and flexibility to cater to both domestic and export markets, aiming for better capacity utilization.
- Quote: “Number one, we get an extra incentive when we are in the DTA area for exports, which is about 3% to 4% additional. Number two, when we are in a DTA area, we are flexible to both cater to the domestic market and export market.”

Brand Business Expansion:
- Simone Federico & Figli: Achieved profitability in its first year. Targeting INR 50 crores sales in FY26. Planned advertising spend of INR 3-4 crores.
- New Brand “Federico”: To be launched at a different, more affordable price point, focusing on synthetics.
- OneMile (e-com platform brand): Targeting INR 2-3 crores sales.
Focus on Specialized Yarn: To drive better realization in the yarn business.
U.S. Market Focus: Actively engaging with new U.S. brands, expecting a bounce back.

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