- Q2 FY25 consolidated revenue grew by 85% YoY, including contributions from acquired entities.
- Standalone revenue growth (excluding acquisitions): 28% YoY.
- Consolidated EBITDA grew by 48% YoY, but margins were affected due to seasonality and currency impact in acquired entities (kenya).
- Generated INR 155 crores in cash from operations in H1 FY25.
- Strong order book and favorable market tailwinds.
- Revenue growth driven by export recovery, particularly to the US (+33% YoY growth).
- Consolidated EBITDA margin was 7% due to seasonality; standalone EBITDA margin at 11%.
- Management expects consolidated EBITDA margins to exceed 10% in the near term and reach 12% at steady state.
- Targeting annual revenue growth of 15%, supported by capacity expansion and strong demand.
- Consolidated production volumes: 14.95 million pieces in Q2; standalone entity contributed 8.1 million pieces.
- Standalone revenue capacity for Q2: INR 650 crores, with potential to reach INR 700 crores per quarter at full utilization.
- Madhya Pradesh Unit 2 expansion to contribute INR 175 crores annually .
- Leveraging global shift in sourcing from China, Vietnam, and Bangladesh to India.
- Strategic relationships with major global brands like GAP, JCPenney, Carhartt, and Columbia.
- Focus on growing market share with existing top-tier customers and diversifying product offerings.
- Approximately 80% of receivables covered under ECGC or supply chain finance programs.
- Consolidated inventory strategies supported by robust order book and capacity expansion plans.
Standalone EBITDA margins expected to improve by 1% YoY over FY26 and FY27.
Current facilities operating at full capacity; new expansions underway to meet demand.
Margins expected to improve as global inventory levels stabilize and demand strengthens.
Blended tax rate expected to remain around 22% due to tax benefits in specific locations.
Top five customers contribute 65%-70% of revenue, with significant runway for deeper penetration. - Investing INR 100 crores in FY25 for capacity expansions, including new units in Madhya Pradesh and South India.
- Enhancing vertical integration through investments in BRFL fabric processing to reduce lead times and improve cost efficiency.
- Increasing automation to boost productivity and operational efficiency.
- Strong demand for high-margin products like women’s fashion and sportswear.
- Seasonality and currency fluctuations, particularly in acquired entities.
- Freight costs and reliance on imported raw materials for certain operations.
- Madhya Pradesh Unit 2 construction to begin in Q3 FY25 and operational by H2 FY26.
- Incremental capacity expansions at Atraco and Matrix to increase consolidated revenue potential.
- Exploring leased capacities in South India for quicker expansion.
- 25% of standalone raw materials are imported, with higher reliance in Q1/Q2 for winter programs.
- Tariff changes and potential policy shifts in the US could further boost India’s export competitiveness.
- Order book remains robust, with strong traction in Q3 and Q4 driven by spring 2025 production.
- Management confident in maintaining growth momentum into FY26, targeting INR 1,250 crore annual run rate from new capacities.
- Expanding relationships with strategic customers for high-value products.
Risks: - Dependence on a few key customers (top customer contributes ~27%).
- Pricing pressure in a competitive global market.
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