RSWM Ltd Q2FY26: 60 MW Green Power, Denim Dreams & a Profit Comeback Stitched from ₹7 Cr Thread
1. At a Glance
RSWM Ltd (BSE: 500350 | NSE: RSWM) — the textile child of LNJ Bhilwara Group — has managed to turn a ₹7.43 crore profit in Q2FY26, after a few rough seasons of red ink. The company, once the denim darling of Bhilwara, seems to be getting its act together. At a current price of ₹152 and a market cap of ₹719 crore, the stock trades at just 0.55x book value, which in human terms means “textile quality, penny price.”
Despite a P/E ratio that can make even luxury investors sweat (89.1x), RSWM posted quarterly sales of ₹1,151 crore, marginally down by 1.29% YoY but with profit growth of 142% YoY — not bad for a firm that’s been weaving more plans than profits lately.
With ₹1,520 crore of debt, a ROCE of 2.59% and ROE of -3.19%, the balance sheet looks like a used denim jacket — faded but still functional. The management, led by the Jhunjhunwalas, is now doubling down on green energy and knitting expansion — spending ₹150–200 crore capex without adding net leverage.
Will these capital stitches finally mend the torn fabric of profitability? Let’s find out.
2. Introduction
Textile stocks have always been like Bollywood sequels — full of hope, style, and usually the same plot: cyclical margins, power cost drama, and export mood swings. RSWM, founded in 1960 and blessed with “Golden Trading House” status, is no stranger to this pattern.
In its six-decade career, the company has spun everything — from synthetic and blended yarn to denim and green polyester fibre — and sold it to a red-carpet clientele list featuring H&M, GAP, Levi’s, Van Heusen, IKEA, and Walmart. If global fashion brands were a WhatsApp group, RSWM would definitely be that friend who supplies everyone’s fabric but doesn’t get tagged in the posts.
After years of margin erosion, power cost spikes, and industry oversupply, RSWM seems to be shifting gears. FY26 is looking like a “go green or go home” year — with a ₹60 crore investment for 60 MW renewable power, another ₹92 crore to modernize knitting operations, and an acquisition spree to grab Ginni Filaments’ spinning division for ₹160 crore.
So, what happens when an old-school spinner meets a green revolution and denim revival? Grab your yarn — this one’s textured.
3. Business Model – WTF Do They Even Do?
RSWM is basically India’s multitasking textile machine — spinning yarn, weaving fabrics, knitting magic, and now, flirting with renewable energy.
Here’s how the threads tie up:
Yarn Division: This is the core. They produce synthetic, cotton, blended, mélange, and compact yarns under brands like Ultima and Kapaas. Think of them as the Tinder of the textile world — supplying everyone from mass brands to premium designers.
Denim Division: 3,000+ denim variants! From distressed to stretch, RSWM weaves jeans that could clothe half of India’s Instagram.
Knitted Fabrics: Single jersey, rib, fleece, pique — basically, all the fabrics you wear on lazy Sundays.
Green Fibre: Recycled polyester fibres made from PET bottles, because sustainability is now a fashion accessory.
Production happens across 12 facilities in Rajasthan and Uttar Pradesh — with 6.27 lakh spindles, 172 looms, and 43,000 MT of green fibre capacity. Utilization is over 90% in yarn and denim, which is impressive when half the textile world is sitting on idle spindles.
Exports? Over 70 countries, contributing 31% of sales.
In short — if there’s fabric involved, RSWM probably has a hand in spinning it. Or a spindle, rather.
4. Financials Overview
Metric
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue
₹1,151 Cr
₹1,166 Cr
₹1,170 Cr
-1.29%
-1.62%
EBITDA
₹79 Cr
₹38 Cr
₹73 Cr
+107%
+8.2%
PAT
₹7.43 Cr
₹3.07 Cr
₹8.37 Cr
+142%
-11%
EPS (₹)
1.58
0.65
1.78
+142%
-11%
EBITDA margins improved from 3.27% to 6.29%, showing the power cost and raw material mix finally cooperating. PAT is small but consistent, which for RSWM is like finding a working sewing machine in a blackout.
5. Valuation Discussion – Fair Value Range (Educational Only)
Comparable peers: KPR Mill (44x), Vardhman (15x), Welspun Living (23x).
So RSWM trades near the lower end of mid-tier textile P/Es.
EV/EBITDA (TTM) = 7.3x (reasonable vs sector median 9–12x).
Assuming FY26 EBITDA at ₹320–350 crore and net debt ₹1,520 crore, EV = ₹2,232 crore.
EV/EBITDA range = 6.4–7x = fair value ₹140–₹180 per share.
A DCF (with modest 6% growth, 11% WACC, and ₹8–10 Cr FCF) also lands between ₹140–₹190.
✅ Educational Fair Value Range: ₹140 – ₹190/share
Disclaimer: This range is for educational analysis only and not investment advice.
6. What’s Cooking – News, Triggers, Drama
This quarter’s RSWM board meeting looked more like a reality show. Here’s the highlight reel:
Renewable Romance: Invested ₹60 crore in Adani-linked renewable ventures for 60 MW supply under green open access. The goal — raise renewable usage to 70% and slash power cost per unit by ₹0.30.
Acquisition of LNJ Greenpet: Bought it for ₹20.01 crore to integrate recycled PET operations. Translation: they’re literally buying their own plastic back.
Chhata Unit Closure: The old spinning unit has been shut. Management claims it’ll rationalize operations and improve overall margins. Employees probably didn’t clap.
Knitting Expansion: ₹92 crore spent to upgrade Mordi & Chhata units, adding 20% capacity and targeting ₹220 crore in incremental revenue.
Total Capex FY26: ₹150–200 crore — all funded internally and through new matched debt.
The company seems to be on a “capex detox plan” — spend big, but promise no new net debt. Let’s see if this corporate yoga pays off.
7. Balance Sheet (₹ Cr)
Metric
Mar 2024
Mar 2025
Sep 2025
Total Assets
3,694
3,611
3,426
Net Worth (Equity + Reserves)
1,297
1,297
1,312
Borrowings
1,890
1,716
1,520
Other Liabilities
506
597
593
Total Liabilities
3,694
3,611
3,426
Assets slightly shrank as they shut non-performing units.
Debt dropped from ₹1,890 Cr → ₹1,520 Cr — a visible deleveraging arc.
Net worth held stable — meaning the ship’s old, but not sinking.
Funny Takeaways:
At least their liabilities are well ironed.
Balance sheet’s tighter than denim skinny jeans.
Borrowing may be high, but at least it’s fashionable debt — funding green power and expansion.
