1. At a Glance – From Sweater to Surprise
₹42 per share.
₹146 crore market cap.
₹74.90 crore quarterly sales.
₹6.00 crore quarterly profit.
Stock P/E: 12.5 vs Industry P/E: 21.6.
ROCE: 2.90%.
ROE: 1.41%.
3-month return: –9%.
Welcome to Modern Threads (I) Ltd, a 1973-born wool specialist sitting quietly in Bhilwara, Rajasthan, exporting yarn to 25+ countries while the stock market barely notices.
But Q3 FY26 just happened.
Profit jumped 4,100% YoY in the December 2025 quarter. Yes, four thousand one hundred percent. That’s not a typo. That’s the kind of number that makes even sheep look shocked.
However… margins are still thin at 3.49% OPM (TTM), ROE is sleepy, and sales growth over five years is just 5.34%. So is this a turnaround story… or just winter seasonal excitement?
Let’s untangle this wool ball carefully.
2. Introduction – The Wool Veteran Nobody Talks About
Incorporated in 1973, Modern Threads (I) Ltd operates through its flagship unit Modern Woollens Ltd. It manufactures and exports worsted yarn, wool tops, and synthetic yarn.
This isn’t a startup. This isn’t AI. This isn’t EV.
This is wool. Merino wool. Lanolin. Spinning waste. Real, physical, textile industry grind.
Revenue mix FY23:
- Woollen: 67%
- Yarn: 33%
- Exports: 44%
- Domestic: 56%
Exports contribute nearly half the revenue. That means currency, Europe demand, global apparel cycles — all matter here.
But here’s the spicy bit:
Recent auditor remarks mention unpaid preference dividend of ₹1,074.96 lakh and qualified review comments.
So while profits spiked this quarter, governance has raised eyebrows.
Are we looking at a genuine operational comeback?
Or a temporary margin burst wrapped in wool softness?
Keep reading.
3. Business Model – WTF Do They Even Do?
Imagine this:
Australian merino wool arrives.
It gets processed in Bhilwara.
It turns into fine worsted yarn.
Then it travels to Europe, Latin America, Middle East, Far East.
They produce:
- 100% Wool Raw White & Dyed Yarn
- Polyester/Wool Blended Tops
- Lanolin (wax, oil, alcohol forms)
- Wool Grease
- Wool Noil & Spinning Waste
Lanolin alone has industrial applications. Wool grease is refined into multiple downstream products.
So yes — this is vertical wool chemistry meets textile engineering.
But here’s the twist:
This is a low-margin, capital-heavy business.
Inventory days (Mar 2025): 186 days.
Cash conversion cycle: 166 days.
That’s half a year of
