This article first appeared on GuruFocus .
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Total Income (Q2 FY27):INR 358.4 crores, up 11.2% QoQ.
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Total Income (H1 FY27):INR 680.8 crores, up 3.6% YoY from INR 657.1 crores.
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EBITDA (Q2 FY27):INR 36.5 crores, up 23.9% QoQ; margin at 10.2% vs 9.1% in Q1.
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EBITDA (H1 FY27):INR 66 crores, up 18.9% YoY from INR 55.5 crores; margin at 9.7% vs 8.5%.
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Profit After Tax (Q2 FY27):INR 8.1 crores, up 84% QoQ from INR 4.4 crores.
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Profit After Tax (H1 FY27):INR 12.5 crores, up 124.6% YoY from INR 5.6 crores.
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Net Debt:INR 515 crores as of September 30, 2026; up INR 43.28 crores in H1 on working capital and higher raw material prices.
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Yarn Division Revenue:INR 103 crores in Q2 FY27 vs INR 112 crores YoY; H1 at INR 199 crores vs INR 222 crores, lower due to higher internal consumption.
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Yarn Capacity Utilization:84% in Q2 FY27 vs 81% in Q2 FY26 and 70% in Q1.
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Fabric Division Revenue:INR 157 crores in Q2 FY27, up 5% YoY; H1 at INR 303 crores, up 14% YoY from INR 266 crores.
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Fabric Sales Volume:58 lakh meters in Q2 FY27 vs 59 lakh meters YoY; H1 at 118 lakh meters, up 8% from 109 lakh meters.
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Fabric Capacity Utilization:82% in Q2 vs 77% YoY; H1 at 81% vs 73%.
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Garment Division Revenue:INR 90 crores in Q2 FY27, up 13% YoY and 30% QoQ; H1 at INR 160 crores vs INR 155 crores.
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Garment Sales Volume:10 lakh pieces in Q2 FY27; 18 lakh pieces in H1 FY27.
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Garment Capacity Utilization:78% vs 74% last year.
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Warning! GuruFocus has detected 6 Warning Signs with BOM:503722.
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Release Date: November 03, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Banswara Syntex Ltd ( BOM:503722 ) reported Q2 FY27 total income of INR 358.4 crores, up 11.2% QoQ, with EBITDA margin improving to 10.2% from 9.1% in Q1.
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Profit after tax surged 84% QoQ to INR 8.1 crore in Q2 FY27, and H1 FY27 PAT jumped 124.6% YoY to INR 12.5 crore.
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Capacity utilization improved across divisions: yarn at 84% (vs. 81% YoY), fabric at 82% (vs. 77% YoY), and garment at 78% (vs. 74% YoY).
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The company is successfully shifting focus to value-added products, with stretch fabric sales up 30-40% YoY and internal consumption of value-added yarns reaching ~40%.
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Strong order book in garments and fabrics, with UK FTA already operational and EU FTA expected by mid-2027, opening significant growth opportunities; new clients like CNA and Marks & Spencer onboarded.
Negative Points
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Raw material price volatility, particularly polyester prices up 25-30% due to West Asia crisis, has not been fully passed on to customers, pressuring margins.
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Yarn division revenue declined to INR 103 crores in Q2 FY27 from INR 112 crores YoY, and H1 FY27 revenue fell to INR 199 crores from INR 222 crores, due to higher internal consumption and export freight challenges.
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Net debt increased by INR 43.28 crores in H1 FY27 to INR 515 crores, primarily due to higher working capital requirements from rising raw material prices.
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Export freight costs have increased exorbitantly, impacting yarn exports and delaying customer liftings, which affected working capital cycle.
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Power and employee costs are putting pressure on the cost base, and the company faces competitive challenges from China in synthetics and a monopolistic fiber supply situation in India.
Q & A Highlights
Q: Despite volume declines across all three verticals, how is the company claiming a pickup in business momentum? A: Vice Chairman Ravindra Kumar Toshniwal explained that the company achieved top-line growth despite lower volumes by focusing on value-added products rather than volume. He noted that gross margin in Q2 FY27 was probably the highest ever achieved, which he views as a very positive sign. He added that raw material price increases have not yet been fully passed on to customers, and better margins were achieved only due to value-added products.
Q: What progress has been made on reducing slow-moving yarn inventory, and how will this impact working capital going forward? A: Vice Chairman Ravindra Kumar Toshniwal said the company aims to reduce total working capital through three levers: faster liquidation of slow-moving inventory, improved debtor/receivables position, and reduced production-to-delivery cycle time. He acknowledged a difficult quarter due to the West Asia crisis and freight challenges, which caused customers to lift made-to-order goods slower than expected. Going forward, the endeavor is to increase sales of value-added goods while gradually bringing down working capital every year.
Q: Which export market currently offers the strongest growth opportunity among the USA, Europe, Japan, and South Korea? A: Vice Chairman Ravindra Kumar Toshniwal identified Europe as the biggest growth opportunity, as the EU FTA is expected to become operational by June or July of next year, with customer orders and interest already very encouraging. The UK FTA has already been implemented, and business with Japan and other FTA countries continues to grow.
Q: What is the update on the Surat facility and garmenting expansion, and what revenue potential does it offer? A: Managing Director Shaleen Toshniwal said the company is awaiting customs NOC in the SEZ, expected by November end, with full denotification by January-February and plant production targeted for Q1 of the next financial year (around April). Surat is expected to add INR 150-200 crores in top-line once fully operational over about two years, with CapEx of INR 30-50 crores depending on automation levels. Garment sales are expected to close at INR 360-380 crores this year, with a clear pathway to INR 550-600 crores over the next two years.
Q: Given the UK FTA and upcoming EU FTA, are new clients being added in the garmenting division, and what margins are expected? A: Managing Director Shaleen Toshniwal said CNA in the UK is now fully on board with an order pipeline of about INR 5 crores to be executed this year and potential of INR 20 crores plus next year. Marks & Spencer onboarding is also in process, and UK garment business (currently about INR 20 crores) is expected to more than double next year. A Polish company called Reserve with 300-400 stores has also been onboarded. European and UK clients are expected to deliver healthier EBITDA margins of 12%-15%.
Q: What are the key operational improvements expected to drive the targeted 10%-11% EBITDA margin, and what is the current and targeted internal yarn consumption? A: Vice Chairman Ravindra Kumar Toshniwal said sales of stretch products in fabrics have increased significantly by almost 30%-40% versus last year, with internal consumption of stretch yarns now at about 450-500 tons per month, up from about 300 tons. Internal yarn consumption is now about 40% of total production, and margin improvement is expected to come from greater use of value-added Siro and stretch yarns internally to produce higher-value fabrics, with the proportion potentially increasing further.
Q: With supportive tailwinds like the UK FTA, can the company break its trend of low single-digit growth and achieve higher double-digit growth in revenue and margins over the next 2-3 years? A: Vice Chairman Ravindra Kumar Toshniwal said the company has achieved this in the current quarter and expects to continue growing quarter by quarter. He acknowledged good tailwinds but also noted headwinds, including polyester prices rising 25%-30% due to the West Asia crisis and oil price increases, plus exorbitant freight costs and high power costs. He stated the company is on course for at least double-digit growth and aims to achieve overall double-digit EBITDA.
Q: Is there a delay in the FY27 CapEx guidance of INR 130-140 crores, given only about INR 36 crores was spent in H1? A: CFO Kavita Govindlal Gandhi said there is no delay as such; CapEx is being done on a need-based basis as projects progress, with several projects in progress including ETP and environment/quality-related work. Maximum projects will be completed in the second half, and the company expects to utilize almost the entire guided amount.
Q: How is the yarn division performing, and why did revenue decline despite improved capacity utilization? A: Vice Chairman Ravindra Kumar Toshniwal reported yarn division revenue of INR 103 crores in Q2 FY27 versus INR 112 crores last year, and INR 199 crores in H1 FY27 versus INR 222 crores in H1 FY26. The decline was due to significantly higher internal consumption of yarn. Capacity utilization improved to 84% in Q2 FY27 from 81% in Q2 FY26 and 70% in the preceding quarter. The division continues to face challenges from elevated raw material prices and export freight costs, which have reduced expected orders from regular export customers.
Q: How did the fabric and garment divisions perform in Q2 and H1 FY27? A: Vice Chairman Ravindra Kumar Toshniwal reported fabric division revenue of INR 157 crores in Q2 FY27 (up 5% YoY) and INR 303 crores in H1 FY27 (up 14% YoY), with capacity utilization at 82% versus 77% last year. Garment division revenue was INR 90 crores in Q2 FY27, up 13% YoY and 30% sequentially, with H1 FY27 revenue at INR 160 crores. Garment capacity utilization stood at 78% versus 74% last year, and the order book remains strong, particularly in jackets, with Q3 FY27 order visibility encouraging.
Q: What drove the overall financial performance in Q2 and H1 FY
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
