Q1 2027 RSWM Ltd Earnings Call

August 5, 2026

Operator 2: Ladies and gentlemen, good evening and welcome to the RSWM Limited Q1 FY27 earnings conference call hosted by Rich Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Richa Singh. Thank you, and over to you, ma'am.

Operator: Ladies and gentlemen, good evening and welcome to the RSWM Limited Q1 FY27 earnings conference call hosted by Rich Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Richa Singh. Thank you, and over to you, ma'am.

Speaker #1: gentlemen, good evening and welcome to the RSWM Ltd Q1, FY27 earnings conference call hosted by Rick Capital. As a reminder, all participant clients will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need an operator by pressing star, then zero on your touchdown phone. Please note that this conference is being assistance during the call, please signal recorded.

Speaker #1: hand the conference over to Ms. Richa Singh, thank you, and over to you, ma'am.

Richa Singh: Thank you, Rio. Good evening, and welcome everyone to RSWM Limited Q1 FY27 earnings conference call. Today from the management we have Mr. Rajiv Gupta, Joint Managing Director, Mr. Manoj Khandelwal, Chief Transformation and Risk Officer, Mr. Nitin Tuljani, President and CFO, Mr. Surendra Gupta, Chief Compliance Officer and Company Secretary, Mr. Rakesh Jain, Senior General Manager of Corporate Finance. Before we proceed with this call today, I would like to take an opportunity for the reminder of disclaimer related to this conference call. Today's discussion may be forward-looking in nature based on management's current belief and expectation. It must be viewed in conjunction with the risk that the business faces and the cause that may cause the future results. Performance and achievements will differ significantly from what may be expressed or implied by such forward-looking statements. I now hand over conference to Mr. Rajiv Gupta for the industry outlook.

Richa Singh: Thank you, Rio. Good evening, and welcome everyone to RSWM Limited Q1 FY27 earnings conference call. Today from the management we have Mr. Rajeev Gupta, Joint Managing Director, Mr. Manoj Bansal, Chief Transformation and Risk Officer, Mr. Nitin Tulyani, President and CFO, Mr. Surendra Gupta, Chief Compliance Officer and Company Secretary, Mr. Rakesh Jain, Senior General Manager of Corporate Finance. Before we proceed with this call today, I would like to take an opportunity for the reminder of disclaimer related to this conference call. Today's discussion may be forward-looking in nature based on management's current belief and expectation. It must be viewed in conjunction with the risk that the business faces and the cause that may cause the future results. Performance and achievements will differ significantly from what may be expressed or implied by such forward-looking statements.

Speaker #2: and welcome, everyone, to RSWM Ltd Q1, FY27 earnings conference call. Today, from the management, we have Mr. Rajiv Gupta, Joint Managing Director; Mr. Manoj Bansal, Chief Thank you, Dale.

Speaker #2: Corporate Finance. Good evening. Before we proceed with this call today, I would like to take the opportunity to remind everyone of the disclaimer related to this conference call.

Speaker #2: Today's discussion may be forward-looking in nature based on management's current belief and expectations. It must be viewed in conjunction with the risks and risks that a business faces, and the costs that may cause a future result.

Speaker #2: Performance and achievements will differ significantly from what may be expressed or implied by such forward-looking statements. I now hand over the conference to Mr. Rajiv Gupta for the industry outlook, following that Mr. Nitin Trillani will take over the financial overview.

Richa Singh: I now hand over conference to Mr. Rajiv Gupta for the industry outlook. Following that, Mr. Nitin Tuljani will take over the financial overview. Thank you, over to you, sir.

Richa Singh: Following that, Mr. Nitin Tuljani will take over the financial overview. Thank you, over to you, sir.

Speaker #2: Thank you, and over to you, sir.

Speaker #3: Thank you. Good evening, everyone. So it is my pleasure to welcome you all to the RSWM Ltd Q1, FY27 earnings conference call. Let me take through the industry outlook and the business environment for the Q1 June 30, 2026.

Rajeev Gupta: Thank you. Good evening, everyone. It is my pleasure to welcome you all to the RSWM Limited Q1 FY27 earnings conference call. Let me take to the industry outlook and the business environment for the quarter ended 30 June 2026. Our financial results, investor presentation, and press releases for the quarter have already been uploaded in the stock exchange. I hope you got an opportunity to have a look on these. The global textile industry continues to operate in a gradually improving yet uncertain environment, with the demand across the key international markets showing sign of stabilization as the inventory correction has already largely moderated. Discretionary consumer spending in the several developed economies remain subdued, resulting in a gradual rather than broad-based recovery in textile apparel demand.

Speaker #3: Our financial results, investor presentation, and press releases for the Q1 have already been uploaded in the stocks' names. I hope you got an opportunity to have a look on these.

Speaker #3: The global textile industry continues to operate in a gradually improving, yet uncertain environment, with the demand across the three international markets showing signs of stabilization as the inventory collection has already largely moderated.

Speaker #3: The stationary consumer spending in several developed economies remains subdued, resulting in a gradual rather than broad-based recovery in textile apparel demand. At the same time, the sourcing strategy of global brands continues to evolve, with increasing emphasis on supply chain resilience, sustainability, and value-based products.

Rajeev Gupta: At the same time, sourcing strategy of global brands continue to evolve with increasing efficiencies on supply chain resilience, sustainability, and value-based products. On micro level, operating environment during Q1 was influenced by mixed demand trends across geographies, with increase in domestic demand while export markets continue to witness a major recovery with the select customers of the ordering patterns. Demand from certain export markets, including parts of Middle East, remained subdued during the quarter. Global brands increasingly focus on reliable suppliers capable of delivering quality, sustainability, and product innovation, reinforcing India's position as a preferred sourcing destination. The quarter also witnessed India government's encouraging policy developments, including continued progress on international trade agreements and initiatives aimed at improving raw material availability. At the same time, geopolitical developments, including the West Asia conflict, contributed to supply chain disruptions and volatilities in energy cost as well.

Speaker #3: However, on micro level, operating environment during Q1 was influenced by mixed demand trends across geographies. With increase in domestic demand, while export markets continue to witness a major recovery with the select customers of ordering patterns, demand from certain export markets, including parts of the Middle East, remains subdued during the Q1.

Speaker #3: Global brands are increasingly focused on reliable suppliers capable of delivering quality, sustainability, and product innovation, reinforcing India's position as a preferred sourcing destination. Q1 also witnessed the Indian government's encouraging policy developments, including continued progress on international trade agreements and initiatives aimed at improving raw material availability.

Speaker #3: At the same time, geopolitical developments, including the West Asia conflict, contributed to supply chain disruptions and volatilities. In energy costs as well, elevated crude oil prices have influenced input costs for synthetic yarn particularly.

Rajeev Gupta: Elevated crude oil prices have influenced input cost for synthetic yarn particularly. The evolving global trade landscape, including the recent US tariff developments, may lead to shifts in global sourcing patterns, creating selective opportunities for the competitive Indian textile manufacturers over the medium term. Overall volatility in raw material prices, geopolitical uncertainties, and evolving global trade dynamics continue to require prudent planning and operational agility. Sharing the outlook that we see. For the Indian textile industry, the long-term outlook remains encouraging despite the near-term volatility, supported by a strong manufacturing ecosystem, vertically integrated value chain, skilled workforce, and improving policy support.

Speaker #3: In addition, the evolving global trade landscape, including the recent U.S. tariff developments, may lead to shifts in global sourcing patterns. Creating selective opportunities for competitive Indian textile manufacturers over the medium term, overall volatility in raw material prices geopolitical uncertainties and evolving global trade dynamics continue to require prudent planning and operational agility.

Speaker #3: Now, sharing the outlook that we feel for the Indian textile industry, the long-term outlook remains encouraging, despite the near-term volatility. Supported by a strong manufacturing ecosystem, vertically integrated value chain, skilled workforce, and improving policy support, structural developments—including the recently concluded India-UK Free Trade Agreement, ongoing discussions on the India-EU Free Trade Agreement, and increasing diversification of global sourcing from concentrated manufacturing hubs—are expected to create meaningful opportunities for Indian textile exporters over the medium to long term.

Rajeev Gupta: Structural developments, including recently concluded India UK Free Trade Agreement, ongoing discussions on India EU Free Trade Agreement, and increasing diversification of global sourcing from concentrated manufacturing hubs are expected to create meaningful opportunities for Indian textile exporters over the medium to long term, particularly for the value-added and forward-integrated products. Improved cotton availability and softer cotton prices, supported by a favorable policy environment and a better crop outlook are also expecting to benefit for the cotton value chain. Our strategic priorities of RSWM remains unchanged: strengthening the product portfolio, improving operational excellence, expanding our presence in value-added segments, and maintain disciplined cost management under RSWM 2.0 initiative. At RSWM, we remain focused on factors within our control by increasing the share of value-added products, improving manufacturing efficiencies, and strengthening customer relationship across domestic and international markets.

Speaker #3: Particularly for the value-added and forward-integrated products, improved cotton availability and softer cotton prices, supported by a favorable policy environment and a better crop outlook, are also expected to benefit the cotton value chain.

Speaker #3: Our strategic priorities of RSWM remain unchanged, strengthening the product portfolio, improving operational excellence, expanding our presence in value-added segments, and maintaining disciplined cost management under RSWM 2.0 initiative.

Speaker #3: At RSWM, we remain focused on factors within our control by increasing the share of value-added products, improving manufacturing efficiencies, and strengthening customer relationships across domestic and international markets.

Speaker #3: We continue to leverage our diversified product portfolio and integrated manufacturing capabilities to respond effectively to changing customer requirements while maintaining discipline on cost and capital allocation.

Rajeev Gupta: We continue to leverage our diversified product portfolio and integrated manufacturing capabilities to respond effectively to changing customer requirements, while maintaining discipline on cost and capital allocation. Further, as India-UK free trade agreement opens new opportunities for the Indian textile sector, we are actively exploring forward integration activities to maximize our potential arising from this FTA. This aligns our long-term strategy of increasing value addition, strengthening customer relationship, and expanding our presence in the high-value textile manufacturing products. As we all have been discussing, sustainability remains to be an integral part for RSWM in our long-term strategy through increasing use of renewable energy, resource efficacy, and circular economy initiatives. We continue to make steady progress on LNJ Greenpet bottle-to-bottle recycling project, an important strategic initiative to expand our presence in sustainable polyester solutions and strengthening our ESG positioning.

Speaker #3: Further, as India-UK Free Trade Agreement opens new opportunities for the Indian textile sector, we are actively exploring forward integration activities to maximize our potential, arising from this FTA.

Speaker #3: This aligns with our long-term strategy of increasing value addition, strengthening customer relationships, and expanding our presence in high-value textile manufacturing products. As we have all been discussing, sustainability remains an integral part of RSWM's long-term strategy, through increasing use of renewable energy, resource efficiency, and circular economy initiatives.

Speaker #3: We continue to make steady progress on LNG green pet bottle-to-bottle recycling projects and important strategic initiatives to expand our presence in sustainable placement solutions and strengthen our ESG positioning.

Speaker #3: Innovation also remains a key differentiator as we steadily expand our portfolio of specialized yarns, functional fabrics, and sustainable textile solutions. Our diversified manufacturing base allows us to cater to multiple end-use industries, reducing dependence on a single product category or market.

Rajeev Gupta: Innovation also remains a key differentiator as we steadily expand our portfolio of specialized yarns, functional fabrics, and sustainable textile solutions. Our diversified manufacturing base allows us to cater to multiple end-use industries, reducing dependence on a single product category or market. We also remain committed to disciplined capital deployment, directing investment towards projects that enhance productivity, modernize manufacturing facilities, and deliver measurable returns within a reasonable framework of time. Looking ahead, the structural strength of Indian textile industry, combined with RSWM's integrated business model, strong customer relationships, and execution capabilities, provides a solid platform for sustainable growth. We remain confident that our focus on value addition, operational excellence, sustainability, innovation, and prudent capital allocation will continue to strengthen our competitiveness and create long-term value for all the stakeholders.

Speaker #3: We also remain committed to disciplined capital deployment directing investment towards projects that enhance productivity, modernize manufacturing facilities, and deliver measurable returns within a reasonable framework of time.

Speaker #3: Looking ahead, the structural strength of Indian textile industry combined with RSWM's integrated business model strong customer relationships and execution capabilities provides a solid platform for sustainable growth.

Speaker #3: We remain confident that our focus on value addition, operational excellence, sustainability, innovation, and prudent capital allocation will competitiveness and create long-term value for all the stakeholders.

Speaker #3: Now, I would hand over the microphone to our CFO, Nitin Pillayani, to take over to financial performance for the Q1 and Q3. Over to you, Nitin.

Rajeev Gupta: Now, I would hand over the microphone to our CFO, Nikhil Pilaniot, to take over the financial performance for the quarter and the full things. Thank you.

Speaker #3: Thank you.

Speaker #2: Good evening, everyone, and thank you for joining us today. I will now take you through the financial and operational performance of RSWM for the Q1 ended June 30, 2026.

Nitin Tulyani: Good evening, everyone, and thank you for joining us today. I will now take you through the financial and operational performance of RSWM for the quarter ended 30 June 2026. Starting with the business environment. The first quarter of FY27 reflected steady progress in operational performance despite a mixed business environment across domestic and export markets. Demand within India remained healthy across several customer segments, supported by stable consumption and improved order execution. Export demand, while relatively softer on a sequential basis, remained in line with the expectations as international customers followed a calibrated procurement approach amid evolving global economic conditions. Our emphasis on product mix optimization, disciplined procurement, and manufacturing efficiency enabled another quarter of improvement in operating profitability, supporting higher gross margins and a stronger EBITDA performance. Moving to the financial performance for Q1 FY27.

Speaker #2: Starting with the business environment, the first quarter of FY 27 reflected steady progress in operational performance, despite a mixed business environment across domestic and export markets.

Speaker #2: Demand within India remained healthy across several customer segments. Supported by stable consumption and improved order execution, export demand, while relatively softer on a sequential basis, remained in line with expectations, as international customers followed a calibrated procurement approach amid evolving global economic conditions.

Speaker #2: Our emphasis on product mix optimization, disciplined procurement, and manufacturing efficiencies enabled another quarter of improvement in operating profitability, supporting higher gross margins and a stronger EBITDA performance.

Speaker #2: Moving to the financial performance for Q1 FY27, revenue from operations stood at ₹1,161 crore, compared to ₹1,142 crore in Q4 FY26, registering a sequential growth of 1.7%.

Nitin Tulyani: Revenue from operations stood at INR 1,161 crore compared to INR 1,142 crore in Q4 FY26, registering a sequential growth of 1.7%. Domestic businesses increased to INR 825 crore from INR 774 crore in Q4 FY26, reflecting healthy demand across key customer segments. Export revenue stood at INR 336 crore, lower than the immediately preceding quarter through the business maintained a diversified customer base across multiple international markets. Gross profit increased to INR 466 crore compared to INR 434 crore in the preceding quarter, with gross profit margin expanding to 39.8% from 37.4%, supported by favorable product realization, better inventory management, and efficient raw material utilization. EBITDA for the quarter stood at INR 94 crore, registering a sequential growth of 10.1% and a year-on-year increase of 16.1%. EBITDA margin improved to 8% compared with 7.4% in Q4 FY26 and 6.9% in Q1 FY26.

Speaker #2: Domestic businesses increased to 825 crore, from 774 crore in Q4 FY 26, reflecting healthy demand across key customer segments. Export revenue stood at 336 crore, lower than the immediately preceding quarter through the business maintained a diversified customer base across multiple international markets.

Speaker #2: Gross profit increased to 466 crore, compared to 434 crore in the preceding margin expanding to 39.8% from 37.4%, supported by favorable product realization, better inventory management, and efficient raw material utilization.

Speaker #2: at 94 crore, registering a sequential growth of 10.1% and a year-on-year increase of 16.1%. EBITDA margin improved to 8% compared with 7.4% in Q4 FY 26 and 6.9% in Q1 FY 26.

Speaker #2: The expansion in gross margins provided sufficient cushion to absorb higher operating expenses while delivering a healthy improvement in EBITDA. Moving to the operating EBITDA for the quarter stood 31 crore, compared with the 30 crore in the preceding quarter, primarily attributable to the increase in working capital requirements profit before tax increased to 24 crore, representing a Q/Q growth of 33.5% and a Y/Y increase of 153.7%.

Nitin Tulyani: The expansion in gross margins provided sufficient cushion to absorb higher operating expenses while delivering a healthy improvement in EBITDA. Moving to the operating level, finance costs for the quarter stood at INR 31 crore compared to INR 30 crore in the preceding quarter, primarily attributable to the increase in working capital requirements. Profit before tax increased to INR 24 crore, representing a QoQ growth of 33.5% and a YoY increase of 153.7%. PBT margin improved to 2.1% compared with 1.6% in Q4 FY26 and 0.8% in the corresponding quarter last year. Profit after tax for Q1 stood at INR 17 crore, compared with INR 7 crore in Q1 FY26. While tax was lower than the immediately preceding quarter, Q4 FY26 had included a significant one-time tax benefit arising from the company's decision to adopt the transitional corporate tax regime under the Income-tax Act, 2025.

Speaker #2: PBT margin improved to 2.1%, compared with 1.6% in Q4 FY 26 and 0.8% in the corresponding quarter last year. Profit after tax for Q1 stood at 17 crore, compared with 7 crore in Q1 FY 26, while PAC was lower than the immediately preceding quarter, Q4 FY 26 had included a significant one-time tax benefit arising from the company's decision to adopt the concessional corporate tax regime under the income tax act 2025.

Speaker #2: Excluding this non-recurring benefit, the underlying earnings trajectory still remained healthy. Our priorities for the remainder of the financial year are as under: our capital allocation philosophy continues to remain disciplined and value-oriented, prioritizing investments that enhance manufacturing efficiency, improve product capabilities, and generate sustainable returns over the medium term.

Nitin Tulyani: Excluding this non-recurring benefit, the underlying earnings trajectory still remains healthy. Our priorities for the remainder of the financial year are as under. Our capital allocation philosophy continues to remain disciplined and value-oriented, prioritizing investment that enhances manufacturing efficiency, improves product capabilities, and generates sustainable returns over the medium term. We remain committed to strengthening our portfolio of differentiated and sustainable products, supported by changing customer preferences and demand for environmentally responsible manufacturing. India's position as a preferred global sourcing destination continues to strengthen, supported by its integrated textile value chain, improving policy environment, and growing emphasis on quality, reliability, and sustainability. Looking ahead, our priorities remain clear: enhance operational efficiency, strengthen customer relationships, improve product realization, and maintain financial discipline. With that, I conclude my remarks. We thank all our shareholders, customers, business partners, lenders, and employees for their continuous confidence and support.

Speaker #2: We remain committed to strengthening our portfolio of differentiated and sustainable products supported by changing customer preferences and demand for environmentally responsible manufacturing. India's position as a preferred global sourcing destination continues to strengthen supported by its integrated textile value chain improving policy environment and growing emphasis on quality, reliability, and sustainability.

Speaker #2: Looking ahead, our priorities remain clear: enhanced operational efficiency, strengthening customer relationships, improved product realization, and maintaining financial discipline. With that, I conclude my remarks.

Speaker #2: We thank all our shareholders, customers, business partners, lenders, and employees for their continuous confidence and support. We will now be happy to take our questions.

Nitin Tulyani: We will now be happy to take our questions.

Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on the touch-tone telephone.

Operator 2: Thank you very much.

Operator: Thank you very much.

Nitin Tulyani: Thank you.

Operator 2: We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Amit Gupta from ICICI Securities. Please go ahead.

Operator: We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Amit Gupta from ICICI Securities. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Speaker #1: To ask questions, please press star and 1. The first question is from Amit Gupta from ICICI Securities. Please go ahead.

Speaker #3: Yeah. Good evening, sir. Am I audible?

Amit Gupta: Yeah. Good evening, sir. Am I audible?

Speaker #2: Good evening.

Nitin Tulyani: Good evening.

Rajeev Gupta: Good evening.

Speaker #3: Yeah, okay. Thank you. Thank you for the opportunity. Sir, my question was on the initiatives to develop a new product. If I recollect, last year there was a joint development agreement with Birla Cellulose to develop a specialty fabric or a textile application using graphene technology.

Amit Gupta: Yeah. Okay. Thank you. Thank you for the opportunity. Sir, my question was on the initiatives to develop new products. If I recollect, last year, there was a joint development agreement with Birla Cellulose to develop a specialty fabric or a textile application on graphene technology. I believe there was some further progress as well with some tie-ups with Birla Cellulose, and then further, I think there was some tie-up with Ceylon-related entities. My question was, what is the update on this particular initiative which was taken last year? Is it gaining traction or it need not be a meaningful special application to textiles, so to say? Is it really evolving to make a difference, or it's not as great as maybe initially thought?

Speaker #3: I believe there was some further progress as well, with some tie-up with Birla Cellulose, and then further, I think there was some tie-up with Ceylon-related entities.

Speaker #3: So my question was, what is the update on this particular initiative which was taken last year? Is it gaining traction, or it need not be a meaningful special application to textiles, so to say?

Speaker #3: Is it really evolving to make a difference, or it's not as great as maybe initially thought?

Speaker #2: So thank you, Amit, for highlighting a very important aspect of our business. NPD has been our focus, and last year when we started working on graphene, we had to tie up with Birla Cellulose for the viscose application of this graphene-based fiber.

Nitin Tulyani: Thank you, Amit, for the very important aspect of business. R&D has been focused, and last year when we started working on graphene, and we had the tie-up with Birla Cellulose for the viscose application of this graphene-based fiber. As RSWM is a part of LNJ Bhilwara Group, so we're going to have a graphene plant which will offer graphene, and we'll be using this for fiber, both in polyester as well as viscose. Finally having impact on both the PV, polyester, and the viscose yarn separately. This project is very much on. We are working on the same. Development are positive. One round of product from graphene, Birla Cellulose has arrived. There has been certain further improvements targeted. Similarly, on the polyester side, we are doing a lot of development in-house.

Rajeev Gupta: Thank you, Amit, for the very important aspect of business. R&D has been focused, and last year when we started working on graphene, and we had the tie-up with Birla Cellulose for the viscose application of this graphene-based fiber. As RSWM is a part of LNJ Bhilwara Group, so we're going to have a graphene plant which will offer graphene, and we'll be using this for fiber, both in polyester as well as viscose. Finally having impact on both the PV, polyester, and the viscose yarn separately. This project is very much on. We are working on the same. Development are positive. One round of product from graphene, Birla Cellulose has arrived. There has been certain further improvements targeted. Similarly, on the polyester side, we are doing a lot of development in-house.

Speaker #2: So as RSWM is a part of LNG Bhilwada group, so we are going to have graphene plant which will offer graphene and we'll be using this for fiber both in polyester as well as viscose.

Speaker #2: And then, finally, find the impact on both PV, polyester, and viscose yarn separately. So this project is very much on. We are working on the same.

Speaker #2: Developments are positive. One round of product from Graphene Birla Cellulose has arrived. There have been certain further improvements targeted. Similarly, on the polyester side, we are doing a lot of development in-house.

Speaker #2: So this is a project which is going to take some time, but we are definitely on it, and we expect fairly good developments in days to come.

Nitin Tulyani: This is a project which is going to take some time, but we are definitely on it, and we expect fairly good developments in days to come.

Rajeev Gupta: This is a project which is going to take some time, but we are definitely on it, and we expect fairly good developments in days to come.

Speaker #3: Very helpful. So just to follow up on this, very broadly, by when can you expect some revenue traction or commercial, what do you say, adaptation of this initiative, or it would be still a little difficult to hazard a get at this stage?

Amit Gupta: Very helpful. Just to follow up on this, very broadly, by when can you expect some revenue traction or commercial, what do you say, adaptation of this initiative? Or it would be still a little difficult to hazard a guess at this stage?

Speaker #2: So, I will not be absolutely clear on this, but I expect that within this financial year, we should get it rolling.

Nitin Tulyani: I will not be absolutely clear on this, but I expect within this financial year, we should get it rolling.

Rajeev Gupta: I will not be absolutely clear on this, but I expect within this financial year, we should get it rolling.

Speaker #3: Understood. And my last question was, is there any thoughts or a study as to how big the total addressable market for this particular initiative will be?

Amit Gupta: Understood. My last question was, is there any thoughts or a study as to how big the total addressable market for this particular initiative will be? That will be my question. Thank you so much, sir.

Speaker #3: That will be my question. Thank you so much, sir.

Speaker #2: So in fact, this is not a product which already is used commercially very aggressively. So there is a potential to use in all possible uses of fabric at this point of time.

Nitin Tulyani: In fact, this is not a product which already is used commercially very aggressively. There is a potential to use in all possible uses of fabric at this point of time. This is one of the very high potential products. Will have many performance as well as medicinal beneficial attached to this product. I think market will be really big. Now, how quickly and how efficiently we are able to capture it is yet to be evaluated. Let us first master this product

Rajeev Gupta: In fact, this is not a product which already is used commercially very aggressively. There is a potential to use in all possible uses of fabric at this point of time. This is one of the very high potential products. Will have many performance as well as medicinal beneficial attached to this product. I think market will be really big. Now, how quickly and how efficiently we are able to capture it is yet to be evaluated. Let us first master this product

Speaker #2: This is one of the very high potential products will have many performance as well as medicinal beneficial attached to this product. So I think market will be really, really big.

Speaker #2: Now, how quickly and how efficiently we are able to capture it is yet to be evaluated. So, let us first master this product, then we'll assess the various applications and then work out the market for the same.

Rajeev Gupta: We'll assess the various applications and then we're going to work out the market of the same.

Speaker #3: Understood. Understood, sir. All the best, and again, congratulations on good set of numbers. Thank you, sir.

Amit Gupta: Understood, sir. All the best, and again, congratulations on both the numbers. Thank you, sir.

Speaker #2: Thank you, Amit. Thanks a lot.

Rajeev Gupta: Thank you, Amit. Thanks a lot.

Speaker #1: Thank you. The next question is from Preerna Junjunwala from Elara Securities. Please go ahead.

Operator 2: Thank you. The next question is from Prerna Jhunjhunwala from Elara Securities. Please go ahead.

Operator: Thank you. The next question is from Prerna Jhunjhunwala from Elara Securities. Please go ahead.

Prerna Jhunjhunwala: Thank you for the opportunity. I just wanted to understand the demand scenario for yarn and fabric business separately in terms of how the prices are moving and how volumes are in the current quarter, whether it's the growth or it is flat. Some color on granular volume and price details would be helpful to understand the results better.

Speaker #3: Thank you for the opportunity. I just wanted to understand the demand scenario for the yarn and fabric business separately, in terms of how the prices are moving and how volumes are in the current quarter—whether there's growth or not. Some color on granular volume and price details would be helpful to understand the results better.

Rajeev Gupta: Prerna, thank you for your question. I could get the first part, which is market outlook on fabric and yarn. I could not really get the second part of your question. If you can elaborate, if it is only subset of the first, then I'll be able to answer. If there is something else you want to target in second question, please elaborate again.

Speaker #2: So Preerna, thank you for your question. I could get the first part, which is market outlook on fabric and yarn. I could not really get the second part of your question if you can elaborate if it is only subset of the first, then I'll be able to answer.

Speaker #2: If there is something else you want to target in the second question, please elaborate again.

Speaker #3: Second question is on volumes. What are the volumes in yarn and fabric businesses, and how the prices have moved during the quarter? And how are we seeing them in current volatile times in terms that's what my question was on the second part.

Prerna Jhunjhunwala: Second question is on volumes. What are the volumes in yarn and fabric businesses, and how the prices have moved during the quarter, and how are we seeing them in current volatile times? That's what my question was on the second part.

Speaker #2: Okay. Fine. So the quarter under review has been really, really volatile. We had all sort of variables affecting us. There's West Asian war, crude prices, thereby polyester prices went up very, very high.

Rajeev Gupta: Okay, fine. The quarter under review has been really volatile. We had all sort of variables affecting us. This West Asian war, crude prices, thereby polyester prices went up very high in March. Started impacting volumes in April, May, and June too. The prices for polyester fiber went up as high as to the tune of 30%. Thereby, uncertainties did prevail in terms of buying from customer end. Customer stocking went to the lowest level for pricing. Everybody was concerned about this. Business during this quarter was more on lifting. Lifting has been average because the prices of yarn were pushed accordingly, and the fabric business was still having further challenge because the prices were not easily absorbed in the downstream further. It is slightly more stable now.

Speaker #2: And March, so it started impacting volumes in April, May, and June too. The prices for polyester fiber went up as high as 30%.

Speaker #2: So thereby uncertainties did prevail in terms of buying from customer apps. Customer stocking went to the lowest level for pricing. Everybody was concerned about this.

Speaker #2: So, business during this quarter was more of a need-based thing. So, lifting has been average because the prices of yarn were pushed accordingly, and the fabric business was still having further challenges.

Speaker #2: Because the prices were not easily absorbed further downstream. So it is slightly more stable now—the prices have been more or less stabilized.

Rajeev Gupta: The prices have been more or less stabilized, the volatility still continues because the crude prices are still fluctuating very high degree. Overall, if you look at the demand side, both international and domestic demand has been volatile, but domestic demand has been comparatively less volatile than international demand. Thereby, in synthetic yarn business, RSWM could do reasonably good sales in this quarter, and the current quarter is also going in more or less same way. For cotton and Melange Yarn, the quarter under review, that means the Q1, has been really good because of the delta between yarn prices and cotton prices, and the spread because of certain amount of stocking that every company does was good. In Q2, it is still doing reasonably good so far.

Speaker #2: But the volatility still continues because crude prices are still fluctuating to a very high degree. So overall, if you look at the demand side, both international and domestic demand have been volatile, but domestic demand has been comparatively less volatile than international demand.

Speaker #2: So thereby in synthetic yarn business, RSWM could do reasonably good sales in this quarter. And the current quarter is also going in more or less same way.

Speaker #2: For cotton and melange yarn, the quarter under review—that means the first quarter—has been really good because of the delta between yarn prices and cotton prices, and the spread, because of a certain amount of stocking that every company does.

Speaker #2: It was good. So, in the second quarter, it is still doing reasonably well so far. The volume, both in yarn and fabric, is reasonably good, but the challenges continue to be there.

Rajeev Gupta: Volume both in yarn and fabric are reasonably good, but the challenges continues to be there in Q2 as well.

Speaker #2: In second quarter as well.

Speaker #3: So if you could elaborate on the numbers that would be helpful in terms of yarn volumes during the quarter and how it has grown.

Prerna Jhunjhunwala: Sir, if you could elaborate on the numbers, that will be helpful in terms of yarn volume during the quarter and how it has grown for yarn and fabric both business.

Speaker #3: For yarn and fabric both business.

Speaker #2: As you want number in terms of the revenue?

Rajeev Gupta: You want number in terms of the revenue?

Speaker #3: Yes.

Speaker #2: So we.

Prerna Jhunjhunwala: Volume. How much metric tons of yarn would you have sold, and what kind of volume you would have done in the fabric business?

Speaker #3: Volume. How much metric tons of yarn would you have sold and what kind of volume you would have done in the fabric business?

Rajeev Gupta: I am not having the figures in terms of the volume, but I can share with you that the capacity utilization has been in mid-90s. We had in Melange, it was around 92, 93. In synthetic yarn around 96, and in cotton yarn it was around 98. All the businesses, the stock has been maintained and the volumes have been utilized fairly nice. In fabric business, in denim, our capacity again has been in 90s, whereas in knit business it has been in mid-80s. I think that is probably what you intended to get from this.

Speaker #2: I don't have the figures in terms of volume, but I can share with you that the capacity utilization has been in the mid-90s.

Speaker #2: So we had in melange, it was around 90 to 93 in synthetic yarn, around 96, and in cotton yarn, it was around 98. So all the businesses, the stock has been maintained.

Speaker #2: And the volumes have been utilized fairly nice. In fabric business, in denim, our capacity again has been in 90s. Whereas in knit business, it has been in mid-80s.

Speaker #2: So, I think that is probably what you intended to get from this. The exact number in terms of production, I do not have at the moment.

Prerna Jhunjhunwala: Yeah.

Rajeev Gupta: Exact number in terms of production, I am not having at this point.

Speaker #3: No problem, sir. We can calculate this. No problem. So next question is actually on the recent joint venture that you have signed for Garment Unit in Denim.

Prerna Jhunjhunwala: No worries, sir. We can calculate this, no problem. Sir, next question is actually on the recent joint venture that you have signed for garment unit in Benin. Wanted to understand what will be your share of JV and when this unit is likely to commission. What kind of revenue potential, what capacity of Benin garments in terms of units would be there. Some color on this JV would be really helpful.

Speaker #3: Wanted to understand what will be your share of GD and when this unit is likely to commission, plus what kind of revenue potential, what capacity of Denim Garment in terms of units would be there.

Speaker #3: Some color on this GD would be really helpful.

Speaker #2: Okay. So, Preerna, it is too premature to really have the final figure on this. Today, the first day, we discussed this in the Board, and we have got the principal approval from the Board for this JV.

Rajeev Gupta: Okay. Prerna, it is too premature to really have the final figure on this. Today is the first day we discussed this in board, and we have got the principal approval from board for this JV. The stake percentage sharing is still under discussion, but RSWM will be a major majority shareholder in this. We'll be able to work on this. The vision for garmenting will be in phases. In the phase 1, we may go up to 5 lakh pieces per month, which may further be added in 2 more phases in the coming period. This is in line with what we have been discussing in last four or five universal call meetings that we see potential in garmenting and downstream expansion from RSWM.

Speaker #2: The stake percentage sharing is still under discussion, but RSWM will be a majority shareholder in this. So we will be able to work on this.

Speaker #2: So the vision for garmenting will be in phases. In the first phase, we may go up to 500,000 pieces per month, which may further be added in two more phases.

Speaker #2: In the coming period. So this is online in line with what we have been discussing in last four, five investor call meetings. That we see potential in garmenting and downstream expansion from RSWM.

Speaker #2: RSWM has been doing fiber. We have been doing yarn. We have been doing fabric. And now logical expansion of this is going into garmenting.

Rajeev Gupta: RSWM has been doing fiber, yarn, and fabric, now logical expansion of this is going into garmenting.

Speaker #3: Understood. So this unit will utilize your fabric capacities that you have internally, or you would be looking forward to manage it as an independent unit of garmenting?

Prerna Jhunjhunwala: Understood. This unit will utilize your fabric capacities that you have internally, or you would be looking forward to manage it as an independent unit of garmenting?

Speaker #2: As a principal, we keep all our businesses independent. If the quality and the price is matching we will sell internally also. This is not a dedicated garmenting unit.

Rajeev Gupta: As a principle, we keep all our businesses independent. If the quality and the price is matching, we will sell internally also. This is not a dedicated garmenting unit for our own capacity. We are open to buy from outside, wherever we require some particular fabric from outside, we'll buy. Wherever is the same fabric, both internal and external will compete and, depending upon the commercial viability, we'll have the decision. This is not a dedicated garmenting line. We'll be open for buying from outside as well.

Speaker #2: For our own capacity. We are open to buy from outside. And wherever we require some particular fabric from outside, we will buy. Wherever is the same fabric, both internal and external will compete.

Speaker #2: And depending upon the commercial viability, we will have the decision. So this is not a dedicated garmenting line. We will be open for buying from outside as well.

Speaker #3: Understood. So, would you also be interested in doing knit garmenting, as your knit fabric capacities are already in place? The logical extension for the knit fabric business is, ideally, garmenting.

Prerna Jhunjhunwala: Understood. Sir, would you be also interested in doing knit garmenting as your knit fabric capacities are also in place, and the logical extension for knit fabric business is ideally garmenting. Any color on that?

Speaker #3: So any color on that?

Speaker #2: So at this point of time, it is for denim, and our exposure in garmenting will start with denim. In the second or third phase, we may consider knit also.

Rajeev Gupta: At this point of time, it is for denim.

Prerna Jhunjhunwala: Knit fabric.

Rajeev Gupta: Our exposure in garmenting will start with denim. In second or third phase, we may consider the knit also. At this point of time, the first phase clearly is for denim wear.

Speaker #2: But at this point of time, the first phase clearly is for denim garment.

Speaker #3: Understood. And I would also like to understand the pet to food-grade chip business that you are entering. You've already started allocating capital to it and about 100 crores or has been allocated already.

Prerna Jhunjhunwala: Understood. I would also like to understand the food grade chips business that you are entering.

Rajeev Gupta: Yeah.

Prerna Jhunjhunwala: You've already started allocating capital to it at about INR 100 crores or it has been allocated already, as I see in your results. Sorry, I may be wrong in capital allocation one.

Speaker #3: As I see in your results. Sorry, my name. I may be wrong in capital allocation.

Rajeev Gupta: Prerna, I can update you on B2B project, which is making food grade granules, which will be used for creating the bottles. We have started this project. This project is on ground in reality. We have the civil construction on. We have placed orders for all critical machines, and project is likely to be completed in Q4 this year for trials, and commercial production may happen in Q1 of next financial year.

Speaker #2: So Preerna, I can update you on B2B project, which is making food-grade granules, which will be used for creating the bottles. So we have started this project.

Speaker #2: This is project is on ground in reality. So we have the civil construction on. We have placed orders for all critical machines. And project is likely to be completed in fourth quarter this year.

Speaker #2: For trials and commercial production may happen in quarter one of next financial year.

Speaker #3: Okay. And so here, what is the kind of revenues or margins that you are seeking to generate largely? Because this is a new business, new category.

Prerna Jhunjhunwala: Okay. Here, what is the kind of revenues or margins that you are seeking to generate largely because this is a new business, new category. The clients will also not be textile clients. Any tie-ups with any customer that you have done to accelerate the utilization levels?

Speaker #3: The clients will also not be textile clients. So any tie-ups with any customers that you have done to escalate accelerate the utilization levels?

Speaker #2: So this will have 50,000 metric ton per year capacity. And we'll be expecting a revenue of 500 CR from the project which we are implementing as a first phase of B2B.

Rajeev Gupta: This will have 50,000 metric tons per year capacity. We will be expecting a revenue of INR 500 crore from the project, which we are implementing as a first phase of B2B. Normally, this industry clocks EBITDA of around 15%.

Speaker #2: And normally, this industry clock beta of around 15%.

Prerna Jhunjhunwala: Okay. 15% EBITDA is the general margin.

Speaker #3: Okay. 15% EBITDA is the general margin. Where can that take occur? And any ties you have done with any customers to scale up utilization?

Rajeev Gupta: Yeah.

Prerna Jhunjhunwala: Any tie-ups you have done with any customers to scale up utilization?

Rajeev Gupta: We have not done any tie-up at this point of time. We are largely focused on creating world-class facilities, which will have a state-of-the-art machinery, and also one of the best products in terms of quality in India. At this moment, more focus is that maybe in the due course we go for some tie-up. At this moment, we have not done any tie-up.

Speaker #2: We have not done any tie-up at this point of time. We are largely focused on creating world-class facilities, which will have state-of-the-art machinery and also one of the best products in terms of quality in India.

Speaker #2: So at this moment, more focus is that. Maybe in the due course, we go for some tie-up. At this moment, we have not done any tie-up.

Speaker #3: Understood, sir. Thank you. And best wishes. Welcome back. Thank you for any further questions. Thank you.

Prerna Jhunjhunwala: Understood, sir. Thank you and best wishes. On that note, thank you for this session. Thank you.

Speaker #2: Thank you, Preerna. Thanks a lot.

Rajeev Gupta: Thank you, Prerna. Thanks a lot.

Rajeev Gupta: Thank you, Prerna.

Nitin Tulyani: Thanks a lot.

Speaker #1: Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Pushkar Jain from Millie Capital.

Operator 2: Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Pushkar Jain from Mili Capital. Please go ahead.

Operator: Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Pushkar Jain from Mili Capital. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Hi. Hi, sir. Thanks a lot for the opportunity. I would just like to ask you about the great guidance for Q1 2027.

Pushkar Jain: Hi, sir. Thanks a lot for the opportunity. I would just like to ask you the growth guidance for FY27.

Rajeev Gupta: Can you be a bit louder? Your voice is not properly audible. Can you come nearer to mic?

Nitin Tulyani: Can you be a bit louder? Your voice is not properly audible. Can you come nearer to mic?

Speaker #2: Can you be a bit louder? Your voice is not properly audible. Can you come near?

Speaker #4: It's audible now?

Speaker #2: Mic.

Speaker #4: Is it audible now?

Pushkar Jain: Is it audible now?

Speaker #2: Yeah, yeah.

Rajeev Gupta: Yeah.

Speaker #4: Yeah. So I was asking you about the growth guidance for the year. And the margins that we expect for the full year, EBITDA margins.

Pushkar Jain: Yeah. I was asking you about the growth guidance for the year and the margins that you expect for the full year, EBITDA margins.

Speaker #2: So Pushkar, that is really forward-looking is the thing. I can only promise you that the performance of the first quarter is positive. We have improved almost 12% over the previous quarter in terms of cash profit.

Rajeev Gupta: Pushkar, that is really forward-looking thing. I can only promise you that the performance of Q1 is positive. We have improved almost 12% over the previous quarter in terms of cash profit, and EBITDA is INR 94 crore, which again is around 8%. If you look at business-wise, outlook remains positive and as a proven management, we are fully working in terms of operational excellence and for the rightful deployment of all resources. Let's keep our fingers crossed. We expect all quarters to be similar or better than this.

Speaker #2: And beta is 94 CR. Which again is around 8%. So if you look at business-wise, Outlooks remains positive. And as a prudent management, we are fully working in terms of operational excellence.

Speaker #2: And for rightful deployment of all resources. So let's keep our fingers crossed. We expect all quarters to be similar or better than this.

Speaker #4: All right. And sir, the growth did not come from the export segment, right, in this quarter? The top line was impacted due to the export demand, right?

Pushkar Jain: All right. The growth did not come from the export segment in this quarter. The top line was impacted due to the export demand, right?

Speaker #2: Yeah, as you know, the geopolitical situation—there is a West Asia conflict going on. There's delayed transit periods, long transit times, and then high freight costs. So, a lot of uncertainties.

Rajeev Gupta: Yeah.

Pushkar Jain: Okay. Thanks a lot.

Rajeev Gupta: As you know, geopolitical situation, there is West Asia conflict going around, delayed transit period, long transit, and then high freight. A lot of uncertainties impacted all this growth for this period.

Speaker #2: Impacted all this growth for this period.

Speaker #4: All right. Thanks a lot.

Pushkar Jain: All right. Thanks a lot.

Speaker #2: Thank you.

Rajeev Gupta: Thank you.

Speaker #1: Thank you. Participants who wish to ask questions, please press star and one. The next question is from Avinash Nata from Parami Financial Services. Please go ahead.

Operator 2: Thank you. Participants who wish to ask questions, please press star and 1. The next question is from Avinash Nahata from Parami Financial Services. Please go ahead.

Operator: Thank you. Participants who wish to ask questions, please press star and 1. The next question is from Avinash Nahata from Parami Financial Services. Please go ahead.

Speaker #3: Thank you. Am I audible, please?

Avinash Nahata: Thank you. Am I audible, please?

Speaker #2: Yeah, please. Go ahead.

Rajeev Gupta: Yeah, please go ahead.

Nitin Tulyani: Yeah, please go ahead.

Speaker #3: Yeah, I have three questions. The first is: हम लोग जो fabric segment में EBIT level पे profit दिखाते हैं, which is like even-Stevens, there is hardly anything.

Avinash Nahata: Yeah. I have three questions. The first is, fabric segment EBIT level profit which is like even Steven, there is hardly anything. Is there a change in transfer pricing? Last year I could see to the extent of INR 35, 36 crores, and in this Q4 and Q1, there is hardly anything as far as the PBIT segment results is considered. Yeah, that's question number one.

Speaker #3: So is there a change in transfer pricing? Last year, I could see to the extent of 35, 36 crores. I mean, this March quarter and June quarter, there is hardly anything as far as the PBIT segment results is considered.

Speaker #3: Yeah, that's question number one.

Speaker #2: Okay. So should I respond to this in the?

Rajeev Gupta: Okay. Should I respond to this?

Speaker #3: Yeah, yeah. We can take it one by one. Yes.

Avinash Nahata: Yeah. We can take it one by one. Yeah.

Speaker #2: That will be better. You observed absolutely right. The quarter in the discussion has been tough for fabric business because of global uncertainties and the tariff things which happened earlier.

Rajeev Gupta: That will be better. You've observed absolutely right. The quarter under discussion has been tough for fabric business because of global uncertainties and the tariff things which happened earlier. The demand, particularly in knitted fabric, was subdued. Customers were operating at really low level of production. Thereby, the demand and the cost net pressures because of increased prices of fiber, gas prices, freight prices, regent chemical prices, everything put very adverse remarks in terms of cost. Thereby, this quarter, a lot of pressure in terms of cost and the demand side resulted in low EBITDA margin for the fabric. This is applicable to both knit and denim, but more so in knit because denim, we are equally balanced for export and domestic. In case of knit, most of our customers are dependent on exports.

Speaker #2: The demand, particularly in knitted fabric, was subdued. Customers were operating at clearly low levels of production. So, thereby, the demand and the cost led to pressures because of increased prices.

Speaker #2: Of fiber, gas prices, freight prices, liaison chemical prices, everything put very adverse remarks in terms of cost. And thereby, this quarter, a lot of pressure in terms of cost and the demand side.

Speaker #2: Resulted in low beta margin for fabric. So this is applicable to both knit and denim, but more so in knit because denim, we are equally balanced for export and domestic.

Speaker #2: In case of knit, most of our customers are dependent on exports. So garmenters whom we are working closely, they are export-oriented and their demand was affected.

Rajeev Gupta: Garmenters whom we're working closely, they are export-oriented and their demand was affected. Fortunately, for last two months, we are seeing positive demand, lot of inquiries, and outlook seems to be better for current quarters.

Speaker #2: Fortunately, for last two months, we are seeing positive demand. A lot of inquiries and Outlook seems to be better for current quarter.

Speaker #3: So basically, which means the yarn has done even better. Because fabric not only in June quarter, March is also negative to the extent of two crores.

Avinash Nahata: Which means the yarn has done even better because fabric, not only in Q1, Q4 is also INR -2 crores.

Speaker #2: Yeah. Yarn is doing better because overall demand for yarn was still good. Fabric had more challenges.

Rajeev Gupta: Yeah, yarn is doing better because overall demand for yarn was still good. Fabric had more challenges.

Speaker #3: The second question is relating to power cost. We can see on an absolute basis, over the last two, three quarters, power cost coming down.

Avinash Nahata: The second question is relating to power cost. We can see on an absolute basis over the last two, three quarters power cost coming down. Give us a sense related to the per unit cost or what kind of reduction has already been captured by your investments into renewables, and over the next seven, eight quarters, what is the further reduction which is possible? This is my question number 2.

Speaker #3: Give us a sense related to the per unit cost or what kind of reduction has already been captured by your investments into renewables. And over the next seven, eight quarters, what is the further reduction which is possible?

Speaker #3: This is my question number two.

Speaker #2: So the impact, yeah, impact of the efforts being done in the energy in terms of going more for renewable sources, is something which is now reflected.

Rajeev Gupta: The impact of the efforts being done in the energy in terms of going more for renewable sources is something which is now reflected. Second, a lot of effort has been done by each production team to reduce the consumption. It is a combined factor of both of this. Just to share with you, our renewable energy now is improved from last year of mid-20s to mid-40s. In the current quarter, we are even going around 60% of power consumption from renewable sources. This is a result of the efforts which we started last year that is reflecting now. Per unit cost will keep on varying month to month because both solar and wind will change with season. Overall for the year, you will find a really good difference, but on month to month and quarter to quarter, you may still have the deviation.

Speaker #2: Second, a lot of effort has been put in by each production team to reduce the consumption. So, this is a combined effect of both of these.

Speaker #2: But just to share with you, our renewable energy now is improved from last year of mid-20s to mid-40s. And the current quarter, we are even going around 60% of power consumption.

Speaker #2: From renewable sources. So this is the result of the efforts which we started last year. That is reflecting now in per unit cost will keep on varying month to month because both solar and wind will change with season.

Speaker #2: So overall, for the year, you will find really good difference. But on month to month and quarter to quarter, you may still have the deviation.

Speaker #3: Sir, on an annualized basis, if you can say, I can understand about solar, wind, seasonality. Pura 27th, 26th to compare करेंगे, तो what is the likely reduction?

Avinash Nahata: On an annualized basis, if you can say, I can understand about solar wind seasonality. What is the likely reduction? A broad range is also okay. Given the targeted growth, what kind of power reduction we are targeting internally?

Speaker #3: I mean, a broad range is also okay. Given the same kind, given the targeted growth, what kind of power reduction we are targeting internally?

Speaker #2: So I expect it will be anything more than one rupee per unit. On an average, year over year basis, because of impact of all these renewable sources we are using more.

Rajeev Gupta: I expect it will be anything more than INR 1 per unit on an average year-over-year basis because of impact of all these renewable sources we are using.

Speaker #3: Again, absolute rupees crores, it will be how much?

Avinash Nahata: In absolute INR crores, it will be how much?

Speaker #2: Impact of 10% is already seen I'm saying impact of 10% is already seen in the current quarter results, like power and fuel was 123 crores in last quarter versus 112 crores, which we are reporting in current quarter.

Manoj Bansal: Impact of 10% is already seen. I'm saying impact of 10% is already seen in the current quarter results, like power and fuel was INR 123 crores in last quarter versus INR 112 crores, which we are reporting in current quarter. Almost a 10% decrease is already there. Over the next quarter, you will see a further decrease.

Speaker #2: So almost a 10% decrease is already there. So over the next quarter, you will see a further decrease.

Speaker #3: Yeah. So I could see that. So that's why my question key, on a full-year basis, on rupees crores, what is the broad range of savings we can do over 26?

Avinash Nahata: Yeah. I could see that. That's why my question, on a full year basis on rupees crores, what is the broad range of savings we can do, over 2026?

Speaker #2: So we are targeting to close it somewhere around 100 crores.

Manoj Bansal: We are targeting to close it somewhere around INR 100 crores.

Avinash Nahata: INR 100 crores of? Sorry.

Speaker #3: 100 crores of? Sorry?

Speaker #2: Each quarter money. Year quarter, talking about money or units?

Rajeev Gupta: He's talking about money. We are talking about money or units?

Nitin Tulyani: He's talking about money. We are talking about money or units?

Speaker #3: In rupees crores, what kind of savings we are targeting in power cost? Like full-year basis, we did 494 we reported 495 crores under power and fuel last year.

Avinash Nahata: In INR crores, what kind of savings we are targeting in power cost? Like full year basis, we reported INR 495 crores under power and fuel last year, 21 March 2026. In INR crores basis.

Speaker #3: March ended 21st, March 26th. So in rupees crores basis, so Avinash, this

Rajeev Gupta: Yeah. Avinash, this is a function of three things. Number one is number of unit consumed, and number two is the kind of utilization we clock in all our manufacturing units. And number three is the power unit cost per unit of power. Now, if you look at the efforts that we have done in terms of reducing the power cost, I think that should give us advantage to the tune of INR 40 crores for the year. The rest overall number will depend on if we increase more units and add more spindles or add more machines. That may still go up.

Nitin Tulyani: Yeah. Avinash, this is a function of three things. Number one is number of unit consumed, and number two is the kind of utilization we clock in all our manufacturing units. And number three is the power unit cost per unit of power. Now, if you look at the efforts that we have done in terms of reducing the power cost, I think that should give us advantage to the tune of INR 40 crores for the year. The rest overall number will depend on if we increase more units and add more spindles or add more machines. That may still go up.

Speaker #2: is the function of three things. Number one is number of unit consumed. And number two, the kind of utilizations we clock in all our manufacturing units.

Speaker #2: And number three is the power unit cost per unit of power. Now, if you look at the efforts that we have made in terms of reducing the power cost, I think that should give us an advantage to the tune of ₹40 crore for the year.

Speaker #2: The rest, overall number will depend on if we increase more units and add more spindles or add more machines. That may still go up.

Speaker #2: But pure.

Speaker #3: So I understand, for the same amount, for the same amount of utilization, A is your cost per unit coming down, which you mentioned 40 CR.

Avinash Nahata: I understand for the same amount of utilization, A is your cost per unit coming down, which you mentioned, INR 40 crores. That's the minimum reduction we could see for the same utilization.

Speaker #3: So, that's the minimum reduction we could see for the same utilization.

Speaker #2: Yeah. Yes. That's it.

Rajeev Gupta: Yes, that's it.

Nitin Tulyani: Yes, that's it.

Speaker #3: Okay, sir. Okay. And this ramp up of this pet project, like you had mentioned, 500 crores on a decent utilization with 15% EBITDA margin.

Avinash Nahata: Okay. This ramp-up of this PET project, like you had mentioned, INR 500 crore on a decent utilization with 15% EBITDA margin. We are likely to start this in Q1 FY2028. What is the kind of utilization? How are we mapping the utilization for this PET?

Speaker #3: So 28, we are likely to start this in first quarter 28. So what is the kind of utilization how are we mapping the utilization for this pet?

Speaker #2: Okay. So Avinash, I'll request Mr. Manoj Bansal to respond to it.

Rajeev Gupta: Okay. Avinash, I will request Mr. Manoj Bansal to respond to this.

Nitin Tulyani: Okay. Avinash, I will request Mr. Manoj Bansal to respond to this.

Speaker #4: See, the first year is going to be at 75%. And probably, we'll scale up the entire production in three years. So, in the third year, we'll probably be at full potential.

Manoj Bansal: See, the first year is going to be 75%, and probably we will scale up the entire production in three years. Third year, probably be full potential. We are being very conscious. We understand the industry standard. 75%, 85%, and then probably up to 90%, 91%. Three years will take to scale up the entire full production.

Speaker #4: We're going very conscious. We understand the industry standard. So 75, 85, and then probably up to 90, 91 percent. So three years will take to scale up the entire full production.

Speaker #3: Understood. And sir, there are a lot of sorry, can you come once again?

Avinash Nahata: Understood. Sir, sorry, can you come once again?

Speaker #4: I said we've considered all the trials and everything because this is a food-grade product. So we need to take all kind of trials, all kind of certifications before we actually approve it, etc.

Manoj Bansal: We've considered all the trials and everything because this is a food-grade product. We need to take all kind of trials, all kind of product certifications before we actually approve, et cetera. We've been very conscious understanding the industry standard. We are proceeding as I've mentioned to you.

Speaker #4: So we've been very conscious, proceeding as I've mentioned to you.

Speaker #3: Right. And this garment business is slightly more labor-oriented, and requires a very different kind of operational skills and management. So do we intend to do a new team under this JV, or can you just spend one minute more on this?

Avinash Nahata: Right. This garment business is slightly more labor-oriented and requires a very different kind of operational skills and management. Do we intend to do a new team under this JV? Or can you just spend 1 minute more on this? Although I understand this is very early, but if there is a thought towards that.

Speaker #3: Although I understand this is slightly very early, but if there is a thought towards that.

Speaker #2: Yes. No, you are absolutely right. This is a new venture, and new business for RSWM. But we definitely will be hiring a competent team, which will be doing this.

Rajeev Gupta: No, you are absolutely right. This is a new venture and a new business for RSWM. We definitely will be hiring a competent team which will be doing this. We'll take care of all the challenges that this business involve, including the skilling and taking care of the quality standards. We'll also try to work very strongly in the machine design, fairly good degree of automation, and then the skill level, of course, has to be topmost priority. All those things, we'll try to take care of this while planning for execution for this project.

Speaker #2: So we'll take care of all the challenges that this business involved, including the skilling and taking care of the quality standards. So we'll also try to work very strongly in the machine design, fairly good degree of automation, and then the skill level, of course, has to be top most priority.

Speaker #2: So all those things we'll try to take care of this while planning for execution for this project.

Speaker #3: Okay. One last question. In your slide number 14, where you speak about your expanding meeting operations, so you're saying that the expected benefits are likely to reflect from Q3, FY 27 onwards.

Avinash Nahata: Okay, one last question. In your slide number 14, where you speak about your expanding knitting operations. You are saying that the expected benefits are likely to reflect from Q3 FY27 onwards. Can you just quantify or qualitatively and quantitatively this INR 92 crores investments in knitting capacity? What kind of benefits can we see in H2?

Speaker #3: Can you just quantify or qualitatively and quantitatively this 92 crores investments in meeting capacity? What kind of benefits can we see in the second half?

Speaker #4: Yeah. See, currently, we have capacity of 650 tons. So after this expansion, probably we'll be touching on 900 tons per month. So in 900 tons, 150 tons will be of printing, which is not there as of now.

Manoj Bansal: See, currently we have capacity of 650 tons. After this expansion, probably we'll be touching on 900 tons per month. In 900 tons, 150 tons will be of printing, which is not there as of now. One of the benefits which we will say is the printing. Our product mix will get enriched. This is how we have actually planned. First, the product mix gets improved and then obviously our offer to the different customers, we can actually give a complete range. These are two benefits which we are seeing, and that's why I'm saying we are actually expecting that in Q3, probably this expansion will complete and we start getting the kind of trials and then obviously scale up of the production.

Speaker #4: So one of the benefits which we can say is the printings over product mix will get increased. So this is how we have actually planned.

Speaker #4: So first, the product mix gets improved, and then obviously our offer to the different customers. So we can actually give a complete range. So these are two benefits which we are increasing.

Speaker #4: And that's why we are actually expecting that in Q3, probably we'll know this expansion will be complete, and we'll start getting kind of trials and then obviously scale up of the production.

Speaker #3: So, if I got it right, you're saying from 650 tons to 900 tons, and this will—you have a value add of over 150 tons of printing.

Avinash Nahata: If I got it right, you are saying from 650 tons to 900 tons, and you have a value add of over 150 tons of printing. Is that correct?

Speaker #3: Is that correct?

Speaker #4: 150 tons of printing capacity. Exactly. Absolutely correct.

Manoj Bansal: 150 tons of printing capacity. Exactly. Absolutely.

Speaker #3: Okay. Okay. One request to the management, sir. The presentation was uploaded, and this was scheduled at 5:30. I mean, we as investors certainly should have at least one hour of time to scan through the presentation.

Avinash Nahata: Okay. Okay, one request to the management, sir. Our presentation was uploaded at 5:15PM, this was scheduled at 5:30PM. We, as investor fraternity, should have at least one hour of time to scan through the presentation. It makes more sense so that it leads towards a meaningful discussion. If you can leave 45 minutes.

Speaker #3: It makes more sense. So that it leads towards a meaningful discussion. If you can leave 45 minutes?

Speaker #2: So Avinash, your point is well taken. Normally, we schedule this call on the next day. But because of certain other engagements, such free engagements, we had to schedule it today itself.

Rajeev Gupta: Naj, your point is well taken. Normally, we schedule this call on the next day, because of certain other statutory engagements, we had to schedule it today itself. Board meeting continued till around 4:00PM, I think secretarial team 4:15PM. Secretarial team tried to did it immediately after that. Point well noted, and we'll take care in future.

Speaker #2: Board meeting continued till around 4 o'clock, I think, Secretarial team. 4:15. So Secretarial team tried to did it immediately after that. But point well noted, and we'll take care in future.

Speaker #3: Thanks a lot, and all the very best to the entire team.

Avinash Nahata: Thanks a lot, and all the very best to the entire team.

Speaker #2: Thanks a lot.

Rajeev Gupta: Thanks a lot.

Speaker #1: Thank you very much. That was the last question. I would now like to hand the conference over to the management team for closing comments.

Operator 2: Thank you very much. That was the last question. I would now like to hand the conference over to the management team for closing comments.

Operator: Thank you very much. That was the last question. I would now like to hand the conference over to the management team for closing comments.

Speaker #2: Yes.

Speaker #3: Sure. So in closing, I extend my sincere gratitude to all our employees, stakeholders, and partners for their unwavering support. With collective effort and a shared vision, we are all well-positioned to drive innovation, strengthen our market presence, and deliver sustainable value.

Nitin Tulyani: In closing, I extend my sincere gratitude to all our employees, stakeholders, and partners for their unwavering support. With collective effort and a shared vision, we are all well-positioned to drive innovation, strengthen our market presence, and deliver sustainable value. The road ahead holds great promise, and we are confident in our ability to grow and succeed in the years to come. Thank you.

Speaker #3: The road ahead holds great promise, and we are confident in our ability to grow and succeed in the years to come. Thank you.

Speaker #4: Thank you.

Rajeev Gupta: Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you very much. With that, we conclude today's conference. Thank you for joining us, ladies and gentlemen. We may now disconnect our lines.

Operator 2: Thank you very much. With that, we conclude today's conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.

Operator: Thank you very much. With that, we conclude today's conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.

Nitin Tulyani: Thanks.

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Q1 2027 RSWM Ltd Earnings Call

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