| Established operational track record and experienced management
Sree Iswarya Textiles Private Limited (SITPL) benefits from an established operational track record of nearly three decades, having been incorporated on 1 July 1996 and engaged in yarn manufacturing since inception. The promoters and key managerial personnel bring long-standing industry experience, with the board led by Ms. Gita Rajasekaran, Mr. Rajasekaran, and Mr. Rajasekaran Prajay Kumaar, all of whom have been associated with the company for several years, providing stability and strategic continuity. Their extensive domain knowledge and hands-on involvement have enabled the company to maintain steady operations and scale its manufacturing capabilities. Acuite believes, the long operational track record, experienced leadership team and established presence in the textile manufacturing value chain will help company’s business profile.
Above average financial risk profile
SITPL’s financial risk profile is above average as reflected in the healthy networth, gearing and debt protection metrics. The networth of the company improved to Rs.147.14 Cr. as on March 31, 2025 from Rs.82.26 Cr. as on March 31, 2024 after considering unsecured loan of Rs.66.23 Cr. as quasi equity as it is subordinated to the bank debt. Consequently, the total debt position (comprising long-term debt of Rs.29.66 Cr., USL of Rs.0.67 Cr., short-term debt of Rs.30.15 Cr. and current maturities of long-term debt of Rs.5.83 Cr. declined to Rs.66.30 Cr. as on March 31, 2025 from Rs.125.86 Cr. as on March 31, 2024. The company has availed additional debt of Rs.10.00 Cr. during FY2026 to fund the 4MW solar power capex. The gearing level improved to 0.45 times as on March 31, 2025 against 1.53 times as on March 31, 2024. The total outside liabilities to tangible networth (TOL/TNW) stood at 0.60 times as on March 31, 2025 against 1.76 times as on March 31, 2024. The debt protection metrics stood comfortable with interest coverage ratio (ICR) and debt service coverage (DSCR) of 3.01 times and 1.17 times respectively, as on March 31, 2025. The debt to EBITDA stood at 2.87 times as on March 31, 2025 against 7.87 times as on March 31, 2024. Acuite believes, the financial risk profile of STIPL will remain above average in the medium-term despite addition of debt.
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| Modest scale of operations and profitability
SITPL’s operations have been moderate with revenues of Rs.99.05 Cr. in FY2025 compared to Rs.93.84 Cr. in FY2024 and Rs.110.61Cr. in FY2023. The marginal year-on-year fluctuations were primarily driven by change in yarn counts and volatile in power generation. During the current financial year till January 2026, the company registered Rs.77.87 Cr. revenue from yarn sales (against Rs.71.64 Cr. during the same period in previous year) and is expected to close the FY2026 with a total revenues of Rs.105-110 Cr., supported by expected addition ~Rs.17.00 Cr. from power sales. The operating profit margin has shown steady improvement over the last three years, improving to 22.80 percent in FY2025 from 16.66 percent in FY2024 and 15.42 percent in FY2023, aided by better yarn realizations and increase sale of power to group company which has higher EBITDA. However, SITPL continued to registered net loss during past three years due to higher depreciation. Acuite believes, the company’s revenue is likely to remain at similar levels over the near term, given full capacity utilization and absence of capacity expansion plans, while operating profit margins are expected to remain healthy supported by higher power sale.
Moderately intensive working capital operations
The working capital operations of SITPL are moderately intensive as evident from the gross current asset (GCA) of 162 days in FY2025 against 177 days in FY2024 and 175 days in FY2023. The stretch in GCA days is due to slight elongation in debtors days which stood at 79 days in FY2025 against 94 days in FY2024 and 54 days in FY2024. The inventory days stood at 59 in FY2025 and FY2024 against 72 days in FY2023. The creditor days stood at 73 in FY2025 against 64 in FY2024 and 36 days in FY2023. The fund based limits were utilized at an average of ~82 percent over the past 12 months ending January 2026. Acuite believes, the working capital operations will remain moderately intensive, as the nature of operations inherently require higher inventory days and longer credit period.
Exposure of profitability to raw material price fluctuations in a competitive textile industry
SITPL operations remains exposed to cyclicality inherent in the yarn and textile sector, where profitability is sensitive to fluctuations in raw cotton prices, demand–supply dynamics, and export competitiveness. Yarn manufacturers often face margin pressures due to volatile input costs and dependence on external factors such as monsoon patterns, global cotton market movements and government policies on Minimum Support Price (MSP) and duty structures. Moreover, the industry is highly competitive and fragmented, limiting pricing power for mid-sized players like SITPL, despite its established operational base.
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