Sutlej Textiles reports Q2 FY26 turnaround despite loss, focuses on value-added products

Sutlej Textiles and Industries Limited reported its Q2 and H1 FY26 earnings, showing a gross margin improvement to 46%, up 350 basis points year-on-year. Standalone income for Q2 FY26 was INR642 crores, a 6% decrease year-on-year, with EBITDA at INR17.48 crores (2.7% margin) and a reported loss of INR18 crores. Spinning capacity utilization for Q2 FY26 stood at 86%, down from 91% in Q2 FY25, due to a deliberate, temporary shutdown of approximately 15,000 spindles.

The home textile segment was a key highlight, demonstrating a strong turnaround driven by value-added products and new geographies. Sutlej Textiles is actively diversifying its customer base and product mix, focusing on value-added and specialty yarns, including industrial and fire-retardant yarns, which show improving margins. Raw material buying prices for the fiber division remained controlled, supporting healthy operating margins.

Strategically, Sutlej Textiles aims to replace at least 33% of its product mix with value-added offerings, which are expected to yield higher net margins in double digits due to increased customer stickiness and higher replacement costs. The company has a committed capital expenditure of approximately INR58 crores for the current fiscal year, with similar amounts projected for future modernization efforts. The average cost for raw material (recycled polyester, PET bottles) is approximately INR44 to INR45 per kg.