1. At a Glance – Polyester Ka Phoenix, Bankruptcy Se Utha Hua Beast
Raj Rayon Industries Ltd is that stock which looks like it came straight out of a Bollywood redemption arc. Once bankrupt, shut down, NCLT-bound and written off by everyone except maybe one very stubborn promoter… and now suddenly posting quarterly sales of ₹305 Cr, PAT of ₹5.87 Cr, and a market cap of ₹1,215 Cr. Stock price at ₹21.8, promoter holding at a jaw-dropping 94.14%, debt of ₹208 Cr, and ROE of 15.3%.
Sounds sexy? Wait. Operating margin is just 5.33%, ROCE is 6.78%, and the stock trades at 36x earnings and 8.9x book value for a commodity polyester yarn player.
In the last 12 months, profits are up 1,976% (low base alert screaming from the rooftop), sales are growing at 27%, but quarterly profit just fell 28% YoY even as sales jumped 33%.
So what is Raj Rayon today?
A turnaround story?
A leveraged capex bet?
Or a finely dressed balance-sheet illusion?
Grab chai. This one is messy, interesting, and slightly dangerous.
2. Introduction – From NCLT Graveyard to Polyester Party
Raj Rayon’s past is not just ugly – it’s textbook failure. Between FY14–FY19, the company bled money like a punctured water tanker. Obsolete machinery, crushing debt, negative ROCE for years, and finally… production stopped in 2018.
Game over? Not quite.
Enter SVG Group in FY21. They didn’t buy a company – they bought a corpse. Assets, land, machinery, liabilities, creditors, the whole drama. Operational creditors were paid off. Old junk machines were thrown out. Fresh term loans of ₹1,850 million were sanctioned for revival.
Fast forward to FY25:
- Sales: ₹1,091 Cr
- PAT: ₹33.4 Cr
- EPS: ₹0.60
- Capacity utilisation climbing
- Plants humming again in Silvassa
But here’s the thing:
this is not a clean fairy tale. This is a high-beta, debt-funded, margin-thin polyester yarn business trying to look premium through capex and niche products.
So let’s stop the motivational speech and open the numbers.
3. Business Model – WTF Do They Even Do?
Raj Rayon manufactures polyester chips, POY, DTY and FDY yarns. In simple terms: synthetic yarn used in textiles, apparel, home furnishing, and anything that isn’t cotton.
Their product portfolio includes:
- Polyester Textured Yarn
- Partially Oriented Yarn (POY)
- Fully Drawn Yarn (FDY)
With fancy variants like:
Round, Trilobal, Octalobal, Full Dull, Semi-Dull, Bright, Cationic, Doped Dyed, Fire Retardant, Anti-Microbial yarns.
Sounds premium? Reality check:
This is still a commodity business where prices move with crude oil, PTA, MEG, and Chinese dumping. Differentiation helps, but margins remain razor thin.
Manufacturing base:
- 25 acres land
- 6 lakh sq ft plant
- Silvassa (tax-friendly, labour-friendly)
Installed capacity:
- Chips: 18,500 tons
- POY: 82,000 tons
- DTY: 46,800 tons
Upcoming capex aims to take:
- POY from 225 TPD → 600 TPD
- DTY from 100 TPD → 400 TPD
Big ambition. Big cheque. Big execution risk.
4. Financials Overview – Growth Hai, Par Mazaa Nahi Aa Raha
Quarterly Comparison Table (₹ Cr)
| Metric | Latest Qtr (Dec-25) | YoY Qtr (Dec-24) | Prev Qtr (Sep-25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 305.39 | 229.33 | 319.32 | 33.2% | -4.4% |
| EBITDA | 16.63 | 13.49 | 15.59 | 23.2% | 6.7% |
| PAT | 5.87 | 8.15 | 8.02 | -28.0% | -26.8% |
| EPS (₹) | 0.11 | 0.15 | 0.14 | -26.7% | -21.4% |
