Bannari Amman Spinning Mills FY26: Three Years of Losses, Then a ₹14 Cr Profit and a Downgrade Reversed
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1 — At a Glance
Bannari Amman Spinning Mills closed FY26 with revenue of ₹870 Cr, down about 2% on the year, and a net profit of ₹14 Cr — its second profitable year after a three-year run of losses that spanned FY23 to FY24. Operating profit recovered to ₹86 Cr from ₹30 Cr two years earlier, and the OPM climbed back toward 10%.
The recovery has a paper trail. Borrowings fell from ₹507 Cr to ₹397 Cr across two years. A rights issue brought in ₹40.71 Cr. The garment unit was sold. And on June 30, 2026, CARE reaffirmed its BBB-/A3 ratings while revising the outlook from Negative to Stable — a company clawing back an inch of ground it had lost.
The tension sits in the ratios. ROE is 3.38% and ROCE is around 7% — a business earning, but earning thinly. The market caps it at ₹216 Cr, or 0.46 times book. A cotton spinner is only ever a few monsoon seasons away from its next inventory problem, and this one carries a working-capital cycle measured in months. The record for the year is one of repair; whether the repair holds is a question the next cotton cycle will answer.
2 — Introduction
Incorporated in 1989 in Coimbatore, Bannari Amman Spinning Mills is the textile arm of the Bannari Amman group, a South Indian house with interests spanning sugar, distilleries, power, education and automobiles. The company runs a vertically integrated textile operation — cotton yarn at one end, woven and knitted fabric, processing, garments and home textiles downstream, with captive wind and, more recently, solar power attached.
The last few years read as a slow contraction. Total operating income slid from over ₹1,500 Cr in FY22 to ₹870 Cr in FY26. Part of that is deliberate: the loss-making garment unit was carved out and sold, and the stake in subsidiary Young Brand Apparel was divested in FY25 for ₹79.54 Cr, per CARE’s rating report. What’s left is a leaner yarn-and-fabric business leaning on cost efficiency rather than volume.
FY26 brought the corporate housekeeping that usually follows a stretch of losses. A rights issue in May 2025 raised ₹40.71 Cr. A 7.2 MW captive solar plant was commissioned in September 2025. Managing Director S V Arumugam was reappointed for three years. And a set of promoter warrants issued in November 2024 was forfeited when the balance money never arrived — a detail Section 6 returns to.
3 — Business Model: WTF Do They Even Do?
They spin cotton into yarn, weave and knit that yarn into fabric, dye it, and occasionally turn it into a bedsheet. That is the whole story, and it is a genuinely integrated one: spinning, weaving, knitting, processing, garments and home textiles under one roof, plus windmills bolted on for captive power because Tamil Nadu electricity bills wait for no yarn count.
Per CARE’s report, FY25 revenue split as yarn 55.4%, fabric including home textiles 26.3%, garments about 5%, with the balance from cotton waste and job work. So this is, at heart, a yarn company wearing a fabric company’s coat. Yarn is where the tonnage moves, and yarn is a commodity — spun to counts ranging from 30s to 100s, sold to a domestic base of 400-plus customers across Tirupur, Kolkata and Kanpur, with a limited export tail into China, Bangladesh and Europe.
The problem with integration in textiles is that it multiplies your exposure to one variable: raw cotton. CARE flags cotton price volatility as a standing risk, since a spinner buys its single biggest input at prices set by monsoons, acreage and MSP. When cotton spikes, the yarn margin thins; when it crashes, the inventory on the shelf loses value. Being “vertically integrated” mostly means the same cotton problem now travels through five divisions instead of one.
The captive-power angle is the quiet edge. Wind capacity of 23.4 MW and the new 7.2 MW solar plant let the company self-supply a chunk of its energy — CARE credits captive power for lifting the PBILDT margin from 7.3% to 9.88% between FY25 and FY26. In a commodity business, the margin often comes from the electricity bill, not the loom.
Does a spinner that can’t control its input price ever really control its margin, or does it just control its power bill and pray about the rest?
