🧠 At a Glance
Sanathan Textiles Ltd is one of India’s key yarn exporters in polyester, cotton, and technical textiles. But despite ₹3,000 Cr in revenue, earnings growth has stagnated, ROCE has slipped to 10%, and the stock is now valued at a reasonable 26x P/E. Oh, and it’s sitting on ₹1,587 Cr worth of CWIP. Is this a textile player or a civil contractor?
✈️ 1. Introduction with Hook
What do you call a company that:
- Makes yarns for your undies and ropes for your cranes
- Grows sales, shrinks margins
- Suddenly quadruples its borrowings
- And has ₹1,500 Cr in “under construction” assets?
You call it Sanathan Textiles — the polyester player that spun an IPO and now wants to weave itself into a mega capex story.
🏭 2. WTF Do They Even Do?
Sanathan manufactures:
- 🧵 Polyester Yarn (core segment)
- 🧶 Cotton Yarn
- 👷 Technical Textile Yarns used in seatbelts, ropes, geo-grids, etc.
They serve:
- 2,500+ customers across apparel, luggage, PPE, furnishings, and auto textiles.
- Large B2B exports – this isn’t your roadside boutique yarn.
Biggest pitch? Diversity of yarns + backward integration = margin defense.
💰 3. Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY25 |
|---|---|
| Revenue | ₹2,999 Cr |
| Net Profit | ₹160 Cr |
| OPM | 9% (up slightly from 8%) |
| ROE | 10.4% |
| ROCE | 10.3% |
| EPS | ₹19.01 |
| P/E | 26.3x |
| Book Value | ₹214 |
| P/BV | 2.34x |
| Market Cap | ₹4,224 Cr |
Decent earnings. ROCE is okay. But growth? That’s the weak thread here.
📉 4. Valuation – Cheap, Meh, or Crack?
- CMP = ₹500
- EPS = ₹19.01 → P/E = 26.3x
- P/BV = 2.34x
- ROE = 10.4%
🧮 Fair Value Range = ₹390 – ₹450
Valuation is slightly ahead of comfort, unless capex pays off. It’s not crack… but it’s not bargain-bin either.
🔥 5. What’s Cooking – News, Triggers, Drama
- CWIP balloons to ₹1,587 Cr in FY25 (up from ₹141 Cr) 🏗️
- Borrowings tripled from ₹380 Cr → ₹1,084 Cr
- Multiple investor meets (Tamohara, Fort, Buoyant)
- FIIs reduced holding from 3.75% → 1.89% in Q1FY26
- ROCE declined from 17% (FY22) → 10% (FY25)
Capex is the story here. But there’s zero clarity on return timelines.
🏚️ 6. Balance Sheet – How Much Debt, How Many Dreams?
| Item | FY25 |
|---|---|
| Total Assets | ₹3,528 Cr |
| CWIP | ₹1,587 Cr 😳 |
| Fixed Assets | ₹934 Cr |
| Borrowings | ₹1,084 Cr |
| Reserves | ₹1,724 Cr |
| Equity Capital | ₹84 Cr |
This is now a capex-heavy infra project disguised as a yarn business. And it’s funded largely by debt.
💸 7. Cash Flow – Sab Number Game Hai
| FY25 (₹ Cr) |
|---|
| CFO |
| CFI |
| CFF |
| Net Cash Flow |
Cash flows are… stable from ops, but completely swallowed by expansion. Let’s hope this ₹1,500 Cr CWIP isn’t a money pit.
📊 8. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 10.3% |
| ROE | 10.4% |
| OPM | 9% |
| Inventory Days | 64 |
| Debtor Days | 18 |
| CCC | -1 (very efficient payables) |
Operational efficiency ✅
Return metrics ❌ slipping
Asset turnover? Waiting on that CWIP to convert.
💥 9. P&L Breakdown – Show Me the Money
| Year | Revenue | OPM | PAT |
|---|---|---|---|
| FY22 | ₹3,185 Cr | 17% | ₹355 Cr |
| FY23 | ₹3,329 Cr | 8% | ₹153 Cr |
| FY24 | ₹2,958 Cr | 8% | ₹134 Cr |
| FY25 | ₹2,999 Cr | 9% | ₹160 Cr |
The business was more profitable in FY22. FY23-FY24 were margin shocks. FY25 is a stabilizing year.
🧶 10. Peer Comparison – Who Else in the Game?
| Company | Sales | OPM | ROE | P/E |
|---|---|---|---|---|
| KPR Mill | ₹6,388 Cr | 19.5% | 17% | 49.1x |
| Trident | ₹6,987 Cr | 13% | 8.2% | 42.4x |
| Vardhman | ₹9,785 Cr | 12.9% | 9.3% | 16.3x |
| Garware Tech | ₹1,540 Cr | 20.7% | 18.7% | 38.6x |
| Sanathan | ₹2,999 Cr | 9% | 10.4% | 26.3x |
Verdict? Fairly valued in the mid-pack. Doesn’t deserve a premium — doesn’t deserve a roast. Yet.
🧾 11. Miscellaneous – Shareholding, Promoters
| Shareholder | Mar 2025 |
|---|---|
| Promoters | 78.58% |
| FIIs | 1.89% |
| DIIs | 12.10% |
| Public | 7.42% |
Retail participation low. Promoters in strong control. FIIs trimmed exposure — could be reading into capex risks.
📢 12. EduInvesting Verdict™
Sanathan Textiles is:
- Solid operationally
- Reasonably priced
- But… carrying ₹1,500 Cr in CWIP and debt like a rucksack full of hopes
🔮 Big Risk: Capex ROI
If FY26 doesn’t show massive earnings expansion, this yarn will unravel.
✅ EduScore: 65/100
Decent company. Smartly run. But right now? All eyes on execution.
✍️ Written by Prashant | 📅 July 4, 2025
🏷️ Tags:
Sanathan Textiles, yarn exporter stock, polyester yarn India, technical textile, textile stock analysis, CWIP heavy company, NSE IPO 2024, FY25 results textile, debt funded capex stock, EduInvesting textile deep-dive
