Thank you. Good evening, ladies and gentlemen.

It is my privilege to welcome you all to the earnings conference call of Sanathan Textiles Limited for the third quarter and nine months ended December 31, 2025. Before we begin, I would like to remind everyone that certain statements made during this call, including comments on our outlook, expectation, and future plans, may be forward-looking in nature.

These statements are based on management's current assumption and assessments and are subject to various risk and uncertainties. Actual results may therefore differ materially from those expressed or implied during the discussion.

Joining us today are Mr. Paresh Dattani, the Chairman and Managing Director; Mr.

Sammir Dattani, the Executive Director; and Mr. Sanjay Shah, the Chief Financial Officer.

The call is being recorded, and a transcript will be available on our website post this discussion. I would now like to invite Mr.

Paresh Dattani, the Chairman and Managing Director, to share his opening remarks.

Thank you, Jude, and a very good evening to everyone. It is a pleasure to connect with all of you as we share our progress for Q3 and the first nine months of FY26.

Before getting into our operational and financial performance, I want to briefly set the context on the broader industry landscape, which I believe is shaping up to be quite favorable for the Indian textile sector. Q3 FY26 was a challenging quarter for the industry, marked by volatility across global trade, regulatory changes, and shift in demand dynamics.

Despite this backdrop, Sanathan Textiles delivered consistent operational performance, underscoring the resilience of our integrated business model and execution capabilities. During the quarter, demand for textile products was impacted by the elevated US tariff, which led to reduced orders from certain export-oriented customers, particularly in the end-use segments such as home textiles and apparels.

In addition, the change in GST rates on fabrics from 12% to 5% resulted in a brief period of inventory buildup across the value chain, as customers deferred purchases to benefit from the revised rate. This was followed by the sudden removal of the BIS QCO requirements in November, which created temporary margin pressure for the industry.

Despite these external headwinds, we were able to fully utilize our installed capacity at our Silvassa facility by pivoting decisively towards domestic placement of material. This ability to adapt quickly to evolving regulatory and demand conditions highlights the strength of our market positioning and operational agility.

Encouragingly, the challenges faced during Q3 are largely behind us. Recent developments have materially improved sentiments for the textile sector.

The settlement of the India-US tariff issue is expected to revive export demand and enhance India's competitiveness vis-a-vis other supplier countries. In parallel, the India-EU trade agreement opens new opportunities across fashion-led consumption as well as value-added segments such as technical and automotive sectors.

At the domestic level, the reduction in GST rates on fabrics is likely to support demand in the coming months, while the Union Budget of 2026 provides a reassuring and forward-looking outlook for the textile sector. The government's emphasis on technical textiles aligns well with our long-term strategy, creating a favorable backdrop for sustained growth.

Against this external and policy environment, our strategic priorities remain clear: scaling capacity in a disciplined manner, expanding our technical textile footprint, and strengthening our integrated yarn portfolio to drive long-term value creation. I will now hand over to Sammir to walk you through the operational performance.

Thank you.

Thank you, Chairman. Good evening, everyone.

I will briefly take you through the operational progress across our manufacturing facilities. The Silvassa facility: our Silvassa plant continued to operate at optimal capacity utilization throughout the quarter, generating stable revenues despite the volatile industry environment.

The facility remains a critical anchor for our operations, supported by strong execution, product flexibility, and the ability to redirect volumes towards domestic markets when required. I'm happy to share that we have progressed well on our technical textile yarn expansion at Silvassa as well.

This expansion will double our installed capacity from 9,000 metric tons per annum to 18,000 metric tons per annum in Q1 FY27, strengthening our presence in the high-value technical textiles and supporting long-term margin improvement. The Punjab facility: our greenfield Punjab facility continues its scale-up during Q3 FY26.

We had commenced our plant operations with a polymerization capacity at 350 metric tons per day. During the quarter, we increased this capacity by 25%, reaching 450 metric tons per day.

Importantly, the incremental volumes were successfully placed with existing and new customers in the North India textile market without any inventory buildup. This scale-up resulted in the Punjab facility achieving EBITDA-positive performance for the quarter.

As of today, the production has reached approximately 575 metric tons per day, and we remain on track to achieving phase 1 polymerization capacity of 700 metric tons per day by the end of Q4 FY26. As highlighted earlier, the ramp-up phase involved certain one-time costs, including capacity scale-up expenses of approximately ₹3.5 crores during the quarter, lower than the commissioning costs incurred in Q2.

As operations stabilize, we expect further efficiency gains to translate into improved margins and working capital performance. Following the achievement of the full phase 1 capacity at Punjab, we intend to move towards execution of phase 2, which will further enhance our polymerization capacity from 700 metric tons per day to 950 metric tons per day.

In line with our growth roadmap, we are expanding our cotton yarn operations in Madhya Pradesh through our subsidiary, Sanathan Polycot Private Limited. The state offers a favorable cotton textile ecosystem, and we will share further details as the project progresses.

Overall, the operational challenges largely behind us, improving demand visibility, and capacity coming onstream, we believe that FY27 will reflect the full earnings potential of our expanded manufacturing base. I will now hand over to Mr.

Sanjay Shah, our CFO, to take you through the financial performance.

Thank you, Sammir. Good evening, everyone.

I will briefly walk you through the financial performance for the quarter and nine months ended December 31, 2025. On a standalone basis, revenue for Q3 FY26 stood at ₹768.1 crores, broadly stable on a sequential basis and up 3.6% year-on-year basis, reflecting consistent operations and full capacity utilization at our Silvassa facility despite a volatile industry environment.

Standalone normalized EBITDA was ₹56 crores, with a margin of 7.3%. As disclosed, normalized EBITDA excludes the one-time impact of additional gratuity liability under the new labor codes of approximately ₹2.6 crores.

The sequential moderation in margins was largely driven by temporary industry factors, including GST-related demand deferrals and pricing pressure following the removal of BIS and QCO requirements. Standalone PAT for the quarter was ₹38.1 crores, representing a margin of 5%.

Q3 FY26 consolidated results: on a consolidated basis, revenue increased to ₹1,078.7 crores, up 31.9% quarter-on-quarter, driven by the continued ramp-up of the Punjab facility and along with it increased sales volumes. Consolidated normalized EBITDA was ₹59.9 crores, with a margin of 5.6%, while reported EBITDA stood at ₹57.2 crores, with a margin of 5.3%.

Importantly, the Punjab facility achieved EBITDA-positive performance during the quarter, marking a key milestone in its commissioning journey. The consolidated PAT for Q3 reflects higher depreciation and higher finance costs associated with the scale-up that happened at Punjab during the quarter.

For the nine months ended December 31, 2025, standalone revenue stood at ₹2,285 crores, with normalized EBITDA of ₹197.3 crores, maintaining a margin of 8.6%. Standalone PAT increased 9.1% year-on-year to ₹135.9 crores.

On a consolidated basis, nine months FY26 revenues were ₹2,642 crores, up 16.6% year-on-year, with normalized EBITDA of ₹192.6 crores and PAT of ₹55.8 crores. During the quarter, we incurred one-time cost of approximately ₹2.7 crores relating to labor code linked gratuity provision and ₹3.5 crores towards capacity scale-up at the Punjab facility.

As Punjab moves closer to the full phase 1 capacity by the end of Q4 FY26, fixed cost absorption is expected to improve, supporting margin expansion and a return to positive consolidated profitability. With improving demand visibility, FY27 should reflect the normalized earning potential of our existing Silvassa facility along with the advantage of the incremental manufacturing capacity at Punjab.

Thank you, Sanjay. We are now open for Q&A.

Hello, yeah. Thank you so much for this opportunity.

Sir, just wanted to understand in the P&L for Q3, is it possible to help us understand exactly how much impact did you have on the top line and profitability because of the tariff situation? Because I think a decent amount of our top line was to customers who export.

One is that, and any other factors, I think there would be upfront costs or maybe before the commissioning there would be employee cost or other costs that would have come for the Punjab facility. In case you can help us to understand the P&L properly, what led to the drop in profitability, and how much of that would be a non-recurring one?

Where are we going from Q4 onwards in terms of sales and profitability? A journey if you could help us understand till FY27, how we should visualize it.

Good evening. Let me take this up with the way that the costs, as you rightly pointed out, a lot of our fixed costs, or majority of our fixed costs, have already been taken on at Punjab.

Due to that, because of the scaling up being slightly delayed, we are at the moment utilizing about 60%-65% of the facility, which will be ramped up in the last quarter. Once we have gone through that journey, yes, we can see the full impact of that, and all the costs including the fixed costs, the depreciation, the interest, after that, we will be EBITDA and PAT positive going ahead in the first quarter itself.

Okay. On the first part, how much of the sales were affected by the tariff situation?

As we have said earlier, our indirect exports is about 25%, and we had said about 5% to 7% of that is to the US. Yes, there was some impact.

More so because most of these customers were our high-end value purchasers. We had to divert because the entire volume was not coming from them.

We had to move to the local market and domestic market, where more of the commodity play was there, which impacted our margins in a certain way to some extent. Now we are back to normal, and I think in the coming quarter, April to June, everything will be normal.

That's why FY27 we are on course to be normal on the EBITDA as well as PAT front.

Sir, was there any other factor that affected the margins? Because first two quarters we were around I think 9% plus, if I can see the numbers,

and

then we have dropped to I think last quarter below 8% and now around 5.5%. Where do we go from here on the margins?

The 5.5% is on a console basis you're talking about, is the 7. The console basis because of the Punjab facility, which is not ramped up fully, which I explained earlier.

Coming to the standalone point of view, as I explained, one was this. The other impact was the QCO.

When the QCOs were removed post the GST, once the GST was reduced, there was a halt by customer buying because of the confusion over the implementation of the new GST regime. Following that, when the QCO BIS was removed, then of course there was a pressure on everything that we held back on the inventory, and so we lost something there.

Net-to-net, as I had always mentioned, the QCO will not be a negative impact on us because our raw material also will come without the QCO. The impact on our product comes immediately.

On the raw material, we can now see it in this quarter coming. We are getting cheaper raw material in now, in this quarter onwards.

Okay. Operationally you're not seeing any challenges to basically take up the Punjab facility to 100%?

It's a ready acceptance by the customers, as you explained in the past call.

Yes. We don't have any challenges there.

Yes, some delay on some equipments was there, but the vendors have set it right, and we are on our way to getting full productivity in the last quarter. There is no challenge on that.

As far as placement of material, it has not been a challenge at all. As I mentioned earlier, what we are setting up there is hardly 20%-25% of what is already consumed there.

We have our own customer base as well as new customers base which are keen to join us as a supply person. We don't see a challenge as far as that is concerned.

What will be the guidance for FY27 on the sales, sir?

FY27, with everything put together, we will have looking at a top line of close to 5,700 and a double-digit EBITDA on that.

Great. Thank you so much.

Hi, am I audible? Hello?

Am I audible now? Is it

Hello, am I audible now? Is it better?

Yeah. Yes, yes.

Good evening, sir. Firstly, congratulations on achieving EBITDA positive on the Sanathan Polycot business.

My first question is on the business spreads. How has been the trend in January compared to December?

Has it improved or is it flat? Any color on that, sir?

You're talking about January compared to December, Harsh?

Yes, sir. Yes, yes.

Yeah. January spreads have improved.

As far as we are concerned, two things will come into play for this quarter. One is yes, the spreads have improved compared to December, January spreads have improved across the verticals.

With the enhancement of the capacity to 700 tons in Punjab over this quarter, definitely we'll have a much better quarter, and we're expecting our PAT to be also better on a console basis, and our EBITDA levels also better than the previous quarter.

Sure, sir. Sir, second question in terms of our future guidance, are we sticking to our earlier guidance of commissioning the phase 2 at Punjab at quarter 4 FY27 and the cotton plant at Madhya Pradesh in quarter 1 FY28, roughly during the same phase?

Are we sticking to that guidance, sir?

No, for the second phase, yes, FY28, we will be fully operational for the second phase of Punjab. As far as the Madhya Pradesh is concerned, we will commence work there post the monsoons this year, because we have just got the allotment of land and we have taken the control of that.

Once the leveling and everything sets in, and by the time we get down to ground levels, it will be post-monsoons. We will be there up and running probably second half of FY28 for the MP.

Second half of FY28 for the cotton plant and first quarter FY28 for the phase 2, That's right.

That's right.

Yeah. Sir, third question is so has the incentives started flowing in for the Punjab plant?

If it is so, then what is the number for this quarter? Incentive run rate for the quarter 3?

No, come again. I didn't follow that question.

Sir, my question is that, has the incentives started flowing in for the Sanathan Polycot business? If it is so, then what is the number for this quarter?

Incentive run rate for the quarter 3? No.

See, there is a process there. When we applied for it, they have vetted all the numbers and all the investment numbers, and then we have got a certificate regarding the confirmation of the incentives.

As far as actually flowing it in, yes, it's set to flow in this quarter.

Second fourth question being, what is the current net debt, and what is the foreign currency exposure to that? Net debt as on December 25th.

The net debt at consolidated level was close to ₹1,300 crores, and the foreign debt was close to €50 million. The entire foreign debt, which is in euros, has been hedged for the entire period of the debt, which is 10 years.

Okay. Sir, last question for my evening is that what is our current EU exposure, and with EU FTA now in place, how do you see this panning out in medium term?

For the EU trade pact?

Yes, sir, yeah.

See, my personal view is that the US tariff deal that we have had is going to have an impact immediately. I think it'll all start reflecting in end of first quarter FY27.

As far as EU is concerned, I think it will still take us a few months post that before we can see the reflection of that.

Sure, sir. Sir, thank you, and all the best for the future quarters.

Thanks.

Thank you, Harsh.

Hi, sir. Just have few questions regarding the impact of QCO, which had probably significant impact during the quarter on margins or spreads this quarter.

How you see Q4? Will we be able to achieve Q2 kind of a spreads or it will still be lower than that?

No, you're right. In the third quarter, yes, the QCO did impact, because as I mentioned, there were following things: first, the GST reduction, which held up movement of material, and then immediately after that came the QCO removal.

There was a bit of a challenge there, but we have overcome that. Our finished products, the impact of the QCO was reflected immediately, whereas the raw material, which also comes lower post the QCO, is impacted slowly, which I said we'll get the full advantage in this quarter coming quarter.

Definitely we will see a better number this quarter going forward, and we will be like the QT Q2 numbers.

Okay. Sir.

Sir, secondly, on the cotton yarn front, what I am hearing from a lot of other players that margin or spreads in cotton yarn are improving. I believe there will be significant demand drivers also at the end of the year.

What is your view on that? Can we say that if the cotton spreads really improves, that simultaneously polyester spreads also sort of improves, means both go in tandem, I believe?

Yes, you are right. The cotton spreads are improved, and we personally feel that, yes, it's on a good wicket and it's going to move up further.

The raw cotton prices are also more or less stable, so that's also helping the cause. Yes, more or less every time the cotton moves up, the polyester responds a little late, but it follows the track.

That's why we expect, from first quarter onwards, even the polyester margins will be improved. The gross margins will improve there, too.

Right, sir. One last on your technical textile capex, I believe you have mentioned that again from Q1 only this capacity will be commissioned.

Again, the impact on the revenue fully will come in Q2 or will it take time to ramp up?

No, it won't take us time because everything will be commissioned at one go, unlike the Punjab facility, which is large and it goes in phases. Here, it's not that big a capacity.

We are going from 9,000 to 18,000, we're doubling, yes, but we will be commissioning the entire facility at one go. There won't be any ramp-up challenges like delaying the thing.

Yes, we will commission first quarter FY27, we may get about half a quarter in that quarter, but the rest of the year we'll get full revenue from that.

Right, right, sir. Thank you.

Thank you very much, sir, and all the best for the future quarters.

Thank you for the opportunity. My first question is on the DGTR's initiation on anti-dumping probe around PTY import from China.

Are such dumping pressures still affecting the industry? Separately, what has been the blended realization impact on your portfolio on the polyester yarn post the removal of QCOs, and whether the prices remain at similar levels or there has been some improvement or downward risk?

No, can you just repeat that question of the anti-dumping part? I didn't understand it.

Just repeat that, please.

There was news article regarding the DGTR's initiation on anti-dumping probe around PTY imports from China. Is this dumping still affecting the industry?

No, no. It will only help us if it comes through, but I think they're still investigations on, and we're yet to see the result of that.

Having said that, in today's condition, hardly anything is coming there. Yes, initially when the QCO was removed, cheaper material did flow in from China, which impacted our pricing, yes.

The prices dropped by almost about 10%-12%, but having said that, post that, almost 50% of that we have recovered back, and we are on our way to get there.

Current prices are down around 6% to 7%?

No, one more thing. That impact was only on the FDY yarn, because on DTY, as such, there was no QCO even before that.

Understood. The current prices are currently at similar levels, or there has been some increase?

No, after the QCO came in, the DTY prices remained there and they have been stable there. The FDY prices did drop once the QCO were removed, but post that, there has been an improvement on the pricing again.

Having said that, the raw material has also dropped following the QCO removal, because earlier because of QCO, nothing was coming in from China. Now raw material is also flowing in from China.

That impact we will see in the first quarter again.

Okay. On the gross margin side, we can see 31% around 30%-31% of gross margins in 4Q and going forward quarters?

And

Yes, we're looking at that.

Understood. Last question: what will be the EBITDA we are looking for in 4Q for consolidated EBITDA and revenue?

No, come again.

Consolidated EBITDA and revenue for 4Q.

For Q4 you're talking about?

Yes, 4Q FY26.

Yeah, 4Q we are looking at anything between 90 to 100 crore consolidated EBITDA.

Okay, ₹90 to ₹100 crores.

Yes.

Revenue?

₹1,200 crores.

A ₹1,200 crores our top line.

Understood. Thank you.

Hello, hi, sir. Good evening.

Good evening.

Sir, my first question would be with regards to the interest and depreciation that we see, I understand, with the new capacities that has gone live, now we have seen this depreciation going up. What would be the usual run rate for next financial year for the interest and depreciation?

Will this be the same of what we are seeing in this quarter?

Similar to this quarter's. Right.

That goes to around ₹130-₹140-odd crores of interest cost for next year.

Right.

Sir, weren't we guiding for ₹80-₹90 crores?

Slightly on the lower side on account of repayments which are scheduled during the course of the year.

Because as far as I remember, we were talking about ₹80 to ₹90 crores some kind of figures in the last quarter. And

No, you were asking on a console basis, you're asking for Punjab facility?

I am asking on the console basis, sir.

See, when I say interest, it also includes the hedging premium which we need to pay

What is total interest?

That would be approximately ₹70-odd crores in the following year.

Okay, ₹70-odd crores. Understood.

Sir, what is the working capital for this nine months? Where are we?

See,

the working capital is close to 1.6 for the standalone. The requirements at the polycot plant at Punjab are very negligible.

Just a suggestion from our side, just to understand. Sir, since our promoter holding is at 78% odd, and we are going for some capacity expansion ahead, do we have any plans to bring it to the minimum public shareholding, and then deploy that money back in the company?

Do we have such plans, so that we do not have to go for a debt?

As per the SEBI regulation, we have to bring it down to 75%, but we have some time on that, we will look at it as we go across the journey.

Understood. Understood.

Sir, one final question on this: since you're talking about ₹90 to ₹100 crore EBITDA, that translates to around 7%-8% of margin that we see. For FY27 specifically, I just wanted to understand, do we see this room coming to around again 9%-10% EBITDA margins again?

No, as I said, we are looking at a top line of about 5,700 for FY27 with a double-digit EBITDA on a console basis.

Understood. I'll fall back in the queue.

Thank you so much for your time.

Hello. Thank you for the opportunity, sir.

Sir, I have a question regarding capex. What is the total capex incurred for 9,000 MTPA technical textiles expansion at the Silvassa plant?

How has this been funded?

For technical textile, see, that

capex is about ₹80-odd crores.

It's about ₹80-odd crores for the expansion at Silvassa.

Okay. How is this been funded, sir?

Through internal accruals.

Internal accruals, okay. Sir, would this ₹80 crores have an impact on the finance cost going forward?

Since it is internal funded, no, I don't think it would have any impact.

Okay. Sir, on the raw material cost during the quarter, has PTA and MEG price movements been the primary contributors?

The fluctuation of the prices or something like that has been impacted?

Yes, you're absolutely right. The PTA and MEG, the fluctuation was as much as about 10% from the bottom to the top.

Okay. Can we expect it to normalize in the coming quarters?

It's already stabilizing now, and I see that by the end of this quarter it'll be absolutely steady to downwards. We don't see raw material moving in a very big segment going forward.

We can expect a gross margin at anything around 31%-odd percent in the coming quarters?

That's right.

Okay. Thank you, sir.

Thank you.

Hi, thank you for the opportunity. Just wanted to understand a few things.

Could you help me with the segment-wise breakup for the Q3 revenue, and also what has led to the impact on the EBITDA margin front? That's my first question.

Second, I also wanted to understand if you could share some more color on the Punjab facility in terms of the capex and how the capacity is expected to ramp up. Lastly, any guidance for the full year of '26 and '27?

I will take it up this way: first, I'll answer your question about the Punjab facility. As we mentioned, we are going to be at about 700 TPD per day, that's 700 tons per day by the end of this quarter.

Going forward by the end of FY27, we will be at 900-and-odd tons per day. The investment for that expansion is not very large, because most of the work for that part of the journey has been done along with this.

It's only a small capex, maybe about ₹150 crores, ₹125 to ₹150 crores, which will add up to adding that additional 200-and-odd tons per day. That's as far as going ahead.

Yes, we will be operating that 700 tons from first quarter FY26 through the years, FY27. That was one part of the Punjab.

The other part of the question, can you just repeat that again, please?

I also wanted to understand the guidance for '27, FY27. FY27,

as I mentioned earlier, on a console basis, at a company level, we are expecting to do an top line of 5,700 with a double-digit EBITDA.

Got it. That's it from my side.

Thank you.

Okay.

Hi, thank you for the opportunity. Most of my questions have been answered, just a couple of more things to understand.

One, in the Punjab facility, the customers that we are catering to, is it fair to assume that majority of those customers are the newly added customers, or is there some bit that's flowing from the transition that's happening from the Silvassa facility to the Punjab facility?

Yes, yeah, we have added a lot many new customers. Yes, a few of our customers who were buying from us from Silvassa have also moved to Punjab.

Thus here we are also tweaking our product portfolio and moving as we planned earlier that once we commission that fully, a portion of the material that was going from here to the north will be placed in the west and on the export market.

Understood. Are we facing any operational challenges in the Punjab region, given that it's a new region for us and it's the first full quarter where we would have serviced through that region?

Any operational challenges that we would be facing?

No, as far as setting it up, yes, the usual challenges of setting up such a big project, which would have been at any other part of the country. On the operational side, we are not facing any issues at all there.

Understood. Secondly, on the raw material side, correct me if I'm wrong, on the console level, around 50%-55% of our raw material sourcing happens from foreign and the rest comes from the domestic sourcing, right?

No, you're slightly wrong over there. On the Silvassa plant, 50% of our raw material comes from abroad, yes, at the moment.

In the Punjab facility, our entire raw material, the both PTA and MEG are coming from the Panipat refinery of Indian Oil, as we had

Understood. Understood.

That is why, I was asking from a console basis and then I was going to move to Punjab.

So On Punjab we are getting it from Indian Oil. Here, we are 50% on imported and 50% domestic.

Once the GAIL facility starts, probably by the end of April, May, we will maybe reduce our dependence on imported even more and come more to domestic.

Understood. If I were to see your gross margins, if you see how the yarn spreads have moved in the last quarter, there was a decline both on a QoQ and a YoY basis, if I just tracked the yarn spreads.

How much of that typically impacts us? Is it the right metric to track if we were to consider the gross margin trends?

Yes, it's the right metrics, yes, you're right. Having said that, I always have mentioned that this is not an industry where we can track on a quarterly basis.

Yes, a 6-month to a 12-month window is the right way to look at us. That's why whenever we give indication, we always say like FY27, well, we are on course and we aim to do a double-digit EBITDA for FY27.

Understood. Just two more questions.

One, could you just help me understand what has been the realization for the technical textile front and the cotton side in 3Q?

I don't have the exact EBITDA breakup if that's what your question is. I can approximately give you a revenue breakup on that.

Sure.

Effectively on our Silvassa facility of where the top line is close to ₹3,000 crores, we do about ₹400-and-odd crores revenue comes from the cotton side and about ₹100-and-odd crores comes from the technical textiles, and the balance comes from the filament yarn. Punjab facility is all from the filament yarn.

Right. Just lastly on the inverted duty structure, given that the yarn PSI rates have been reduced, is there any, again, operational challenges from working capital perspective that we would be facing because of that?

Yes, there are no challenges except that, yes, we have a larger blockage of funds because of the larger inversion. Earlier we had an inversion from 18 to 12; now we have an inversion from 18 to 5.

There's a little more money blocked, but having said that, the government is also working and we are seeing that result that the refund of the inversion will be coming to us faster than it was coming earlier. Yes, there will be a little more working capital blocked on that.

Understood. By when do we expect the capacity utilization, which currently for Punjab is at around 60%-65%, like you rightly highlighted, to reach to closer to the 100% levels?

Is it fair to assume in the next 6 months we'll be there?

No, 100% level means phase 1, right, which is 700 tons?

Phase 1. Just from the phase 1.

That we will be there before the end of this quarter.

Understood. Understood.

Lastly on the capex side, given that most of our capex is already done with, fair to assume that for the next years, if we were to build in capex numbers, it should be mostly around the maintenance capex and a bit of the phase 2?

No, what we need on the phase 2, nothing on the maintenance side. What we need for the second phase, because we have got our utility, our buildings, our infrastructure, everything in place, the automations, everything, the warehousing, everything is done for the entire two phases.

What we need for the next phase is just a few spinning lines and a few DTY machines.

Sure, sir. Basically, I was asking that from an overall company perspective for FY27, major capex will be towards the overall maintenance side, right, including the Silvassa plant?

You're not going to expend too much on the incremental capex for any new land or machinery or anything?

No, on the Punjab facility you're asking?

Overall, I said, sir, overall.

No, overall what we will be spending not on the maintenance, but what we will be spending now will be about ₹100-and-odd crores for the second phase at Punjab, and we will be spending about ₹400-and-odd crores at the cotton facility for Madhya Pradesh, which will be done gradually over the period of time, and we will be moving and seeing our cash flows accordingly, we'll be moving on that subject.

The cotton facility will flow into our revenue numbers from FY28, or we expect some bit to start?

No, we aim to commission that where the numbers will hit in the second half of FY28.

Understood. Understood.

This was really helpful. Thank you, and all the best.

Thank you.

Thank you. As we look ahead, our confidence is anchored in three key pillars: First, disciplined execution.

Over the past few quarters, we have demonstrated our ability to scale operations responsibly, managed commissioning complexities, and adapt quickly to changing market and regulatory conditions. The stabilization of our Punjab facility, continued optimal operations at Silvassa, and steady progress on our technical textile expansion reflects a strong operational foundation built on process discipline and execution focus.

Second, improving external tailwinds. The resolution of the India-US tariff issue, the opening of opportunity under the India-EU trade agreement, supportive domestic policy measures, and the rationalization of GST on fabrics collectively improve demand visibility and restore confidence across the textile value chain.

These developments are expected to support both domestic and export-oriented demand and create a more predictable operating environment going forward. Third, a clear and well-defined strategic roadmap.

Our growth strategy remains centered on strengthening our integrated yarn platform, expanding into higher value-added segments, and scaling capacity in a phased and capital-efficient manner. With phase 1 of Punjab nearing completion, visibility is on phase 2, expansion of technical textile yarn capacity at Silvassa, and the upcoming cotton yarn project in Madhya Pradesh, we believe we are well positioned to drive sustainable and profitable growth.

Importantly, our focus remains on long-term value creation through operational excellence, prudent capital allocation, and a strong balance sheet management. I would like to take this opportunity to sincerely thank our employees across all locations for their dedication and resilience, particularly during a period of industry volatility and operational scale-up.

I also extend my gratitude to our shareholders, customers, lenders, and business partners for their continued trust and support as we execute the next phase of our growth journey. Thank you for your time and participation today.

We'll be happy to see you again. Thank you.