Synopsis: Sangam (India) reported a strong start to FY27, with profit after tax surging over 18 times year-on-year, supported by better realizations, an improved product mix, and operating leverage. Alongside the quarterly performance, the company reaffirmed its Rs. 1,500 crore capital expenditure plan aimed at completing its integration from fibre to garments, strengthening its long-term growth strategy.
Integrated textile manufacturers are increasingly focusing on operational efficiency, value-added products, and forward integration to improve profitability amid evolving domestic and export demand. Reflecting this trend, Sangam (India) delivered a healthy operational performance in the first quarter of FY27 while outlining a long-term expansion roadmap that aims to strengthen its position across the textile value chain.
Shares of Sangam (India) Limited were trading at Rs 619.2, down by 2.79 percent from the previous close of Rs 636.95. The stock opened at Rs 654.95, touching an intraday high of Rs 672.5 and a low of Rs 615.15. The company currently has a market capitalisation of Rs 3,129 crore.
Financial Performance
Sangam (India) reported Q1 FY27 revenue of Rs. 867 crore, registering an 8.1 percent year-on-year increase from Rs. 803 crore in the corresponding quarter last year, supported by healthy demand and steady execution across its businesses.
Although revenue moderated marginally by 1.5 percent compared to Rs. 880 crore reported in Q4 FY26, the company’s profitability improved at a much faster pace, indicating stronger operational efficiencies rather than volume-led growth.
The company witnessed a sharp improvement in margins during the quarter. Gross profit increased 26.7 percent year-on-year to Rs. 378 crore, while the gross margin expanded by 640 basis points to 43.6 percent, compared with 37.2 percent in Q1 FY26. Operating performance remained even stronger, with EBITDA rising 59.6 percent to Rs. 112 crore from Rs. 70 crore in the year-ago period.
Consequently, the EBITDA margin improved to 12.9 percent, compared with 8.8 percent a year ago and 11.2 percent in the previous quarter. Management attributed the improvement to better realizations, a favourable product mix, operating leverage, and disciplined cost management.
The improvement at the operating level translated into a substantial increase in earnings. Profit Before Tax (PBT) surged to Rs. 55 crore, compared to Rs. 3 crore in Q1 FY26, while Profit After Tax (PAT) increased to Rs. 41 crore, up from Rs. 2 crore in the corresponding quarter last year and Rs. 33 crore in Q4 FY26.
As a result, the PAT margin expanded to 4.7 percent from 0.3 percent a year ago, while basic earnings per share (EPS) rose sharply to Rs. 8.16 from Rs. 0.42. The sharp increase in profitability despite single-digit revenue growth highlights the benefits of improved cost control and higher operating leverage across the business.
High Capacity Utilisation
The quarter saw strong operational metrics, indicating strong demand across the company’s core businesses. Denim fabric capacity utilisation was 98% and PV fabric 97 percent, indicating efficient manufacturing asset use. Yarn production was 22,853 MT, denim fabric production was 144 lakh metres, and PV fabric production was 194 lakh metres, one of the strongest quarterly performances. At 14 lakh pieces, capacity utilisation improved to 50% as the company scaled up its garment business.
A high level of capacity utilisation is particularly important for integrated textile manufacturers, as it allows fixed manufacturing costs to be spread over higher production volumes, thereby supporting operating margins. The strong utilisation levels across Sangam’s fabric businesses, therefore, complement the improvement witnessed in quarterly profitability.
The revenue mix remained diverse for the company. Domestic sales made up 67% of revenue, while exports made up 33%. Revenue came from denim fabric (31%), cotton yarn (25%), woven fabric with processing (22%), PV yarn (20%), and garments (2%), reducing dependence on any one product segment or geography. The company exports to over 50 countries, balancing domestic and international revenue.
Rs. 1,500 Crore Expansion
Beyond quarterly performance, Sangam is working on its Rs. 1,500 crore investment plans, which are expected to be completed by March 2029. The investment will complete the company’s integration across the cotton and recycled synthetics value chains and allow it to move into garment manufacturing, management said. The expansion will be financed through a mix of internal accruals and term debt with disciplined leverage.
The project includes manufacturing capacities of 10 lakh denim garments per month and 5 lakh PV garments per month, allowing Sangam to move further up the textile value chain by supplying finished garments instead of only yarn and fabrics. At full utilisation, management expects the projects to generate around Rs. 300 crore in annual EBITDA, thereby creating an additional growth engine for the business.
This capex involves modernisation of 80,000 cotton yarn spindles, setting up 2,700 new open-end rotors, two denim production lines, 40 TPD expansion of recycled polyester fibre capacity, new energy-efficient PV yarn machinery and addition of 15 lakh metres per month of PV fabric capacity. These investments are expected to improve the manufacturing efficiency and the vertically integrated model of the company.
Renewable Energy Investments
Power is a major cost for textile manufacturers, but Sangam is reducing it through renewable energy investments. The company operates 36 MW of renewable energy capacity, including 19 MW solar, 5 MW wind, and 12 MW hybrid projects, and 40.7 MW is under implementation, including 18 MW solar, 2.7 MW additional solar, and 20 MW hybrid. Sangam’s renewable energy capacity will reach 76.7 MW after completion.
Management estimates that these investments will generate annual savings of around Rs. 48 crore, including Rs. 22 crore from solar projects and Rs. 26 crore from hybrid projects.
Besides lowering power costs, the renewable energy programme also strengthens the company’s sustainability profile, which is an increasingly important factor for global apparel brands that prioritise environmentally responsible sourcing partners.
Sangam (India) Limited is one of India’s leading integrated textile manufacturers with over 40 years of operating history. The company operates six manufacturing facilities in Rajasthan, employs more than 10,000 people, and exports its products to over 50 countries. Its integrated operations span spinning, denim fabrics, PV fabrics, recycled polyester fibre, knitting, and seamless garments, enabling it to serve leading domestic and international apparel brands.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
