Thank you very much, sir. We will now begin with the question -and-answer session. We have our first question from the line of Akshay from Alpha Invesco.

Congratulations on the set of numbers. I just had a few questions. Sir, I just had a few questions. So if you could highlight what is the contribution of exports for fabrics and garments separately?

Okay. Is that -- is there any other question?

Yes. Okay. So next would be what would be our jackets contribution? I believe we were giving volume and value -wise segmentation like what sales we did from jackets separately. If you could highlight that? And what would be a segment-wise margins? And then are we seeing enough demand and inquiry pipeline now that we are feeling confident to rather add more capacities instead of just focusing on the maintenance capex that we've been doing for 2, 3 years? Are we looking forward to adding more on towards expanding the capaciti es? Yes, that's it from my side?

The overall exports remains at 48%. But since you wanted to know the fabric and garment, overall exports, fabric and garment contributes around 70% of exports.

Okay. So fabrics and garments, 70% is export, 30% is domestic market?

No, no. 70% is total turnover of exports from fabric and garments and 30% comes from yarn.

If you ask just about garment, about 60% is export and 40% is domestic. For fabric, I believe it's 50% - 50%.

50% - 50%, yes.

Okay. And what would be your jacket contribution?

So generally, we've been averaging about 600,000 jackets a year, roughly about 50,000 jackets a month. This year, we expect to close between 800,000 to 900,000 jackets. We will probably be averaging between 70,000 to 75,000 jackets a month.

And what would be the run rate in Q1?

In Q1, the demand for jackets has been relatively soft. I think we closed at about 135,000 jackets. But the run rate from here onwards is upwards of 75,000 a month, and the booking is almost confirmed till end December.

Right now if you get to the segment-wise margins, more or less, we expect the margins in the Fabric business to be about between 12% to 14% EBITDA and in the Garment business between, say, 8% to 10%. And our yarn business is also somewhere between 8% to 10%. And our consolidated EBITDA target is at about 12%. In this first quarter, we achieved 9%, but we expect to cover it up an average 12% by the end of the year.

Okay. So were the margins in line in Q1 or this is something that we are expecting for full year '27?

They were only in line in the Fabric business for the first quarter. Yarn because of capacity utilization, we didn't hit the target and Garment because of the

goods not being dispatched in time due to the container availability, we had a backlog.

Okay. Okay. Yes. And on the capacities, if you could highlight, like are we confident enough we seeing...

Your last question was on the demand?

And the growth.

And I think, yes, the demand is definitely looking good for both, I can say, for both fabric and garment, at least for the next 2 quarters is looking very healthy and meeting our projections or somewhat slightly surpassing our projections. So that keeps us optimistic. And with all of the tailwinds that Ravi ji has mentioned in his speech, we expect demand should improve going forward as we hit the next year as well.

So we are actually thinking of making investments, which we continue to make. This year, we will be investing another about INR140 crores is planned and already sanctioned. And we will be making these investments in fabric and garment and some in common infrastructure. So we are being more aggressive on what investments we have to make to supplement the capacity as we are anticipating that there will be demand, which will cover up whatever capacity we have and we'll need more.

Okay. So of this INR140 crores, could you just segregate which would be maintenance that we're supposed to do to maintain the current capacity? And what portion would be to expand further capacity?

I mean in general, we are looking at an expansion next year of about 20%, 25% in garment and an expansion of about 20%. I'm talking now '27-'28 FY. In that, we expect to close this year close to around INR1,500 crores. And then we are talking about '27 -'28, another expansion of 20% in o ur garment and Fabric business. Yarn, we haven't yet made the numbers out. We could maintain our yarn business or even marginally grow it while keeping both these expansions have. That's about roughly what we are looking at based on these -- that we are already making.

The next question is from the line of Nishant from Green Portfolio.

Am I audible, sir?

Yes, go ahead.

Yes, Nishant.

Sir, I want to know, I know the quarter 1 is seasonally your weakest quarter, but the sequential drop was still sharp, like garment revenue down 28% and the yarn volumes down 21% versus quarter 4. So my question is, how do you build from the soft start to much stronger second half? Your full year guidance earlier, you said INR1,500 crores. And on garment specifically, I want to know was that fall just shipment that got delayed and come back later or the real demand you have actually lost? Like I want to know on the -- specifically on garment sector?

Right. So I'll let Shaleen answer the garment question first.

Yes. Thank you, Nishant. I think that's a good question because if we could have a stronger start to the year, that obviously gives us a much better opportunity to get overall better numbers. Now when it comes to garment, this particular quarter is for export is the sweet window for maximum export s for the autumn/winter season. And unfortunately, that autumn/winter season has been a little bit weak for us in terms of export demand. And also for the domestic demand, that also is a little bit of a weak period because the festive season shipments really pick up from July onwards. So that first quarter tends to be a little bit weak for garments. Now to supplement it going forward, we're focusing on improving our autumn/winter product range. And I'm happy to say we have done a lot of sampling this year. So hopefully, next year, we will have an improved number in the first quarter. And going forward , for the rest of the year, already the numbers have improved significantly in terms of the order book. So I'm confident that we're looking at possibly a INR100 crores quarter sales from here onwards on the garment side.

So they have next 3 quarters.

Next 3 quarters.

So INR300 crores over 3 quarters.

And what about July, sir?

July is on target. We should have, I think, finished at about INR30 crores with whatever spillover, INR30 crores. And I think by the end of this quarter, we should be hitting that round about INR100 crores mark.

Okay. So July is on target?

Yes, yes.

We have our next question from the line of Pushkar Jain from Mili Capital.

You said FY27, our revenue guidance is at INR1,500 crores. What is our margin guidance for the year, sir?

The margin you're saying?

Yes.

Yes. We had projected a margin of 12% EBITDA over this INR1,500 crores. So quarter 1 has been 9%. We hope to recover the rest in the 3 quarters that are to come to average out 12%. We are still maintaining that.

The next question is from the line of Nirbhay Mahawar from N Square Capital.

Sir, we have invested close to INR500 crores in last 5 years, and now we are again talking about INR150 crore s investment. And then also our revenue guidance is pretty muted. So as an organization, while fabric is doing pretty good, but as an organization, are we staying very contented with a very, I would say, moderate revenue growth?

So we are trying to push our garment growth and our yarn division's ability to be able to predict the labor shortages and manage them better. So I think those 2 once they start firing and all the 3 engines are working well, our growth will pick up well. And I think that you will begin to see that even in quarter 2. So I

would say that you need to watch the next 2 quarters, and then you will see what changes are happening to allow the growth to pick up momentum. The investments that have been made, I wouldn't look at a 5-year window, but I'd just say in the last 3 years or so, we've done maybe about INR350 crores, in which maybe about INR150 crores happened in the Fabric business and about INR130 crores happened in the yarn business. So the Fabric business has shown the results, and we will begin to continue to use this investment to grow further at the rate of 20% for the next 2 or 3 years with that investment. And in the yarn business, it hasn't shown the results only because we haven't been able to utilize the capacity due to labor. And you will see that the value - added portion of the yarn has gone up. Last quarter, if you look at the number, our capacity utilization being so low, yet we managed to make money in the yarn business, even at a 70% capacity utilization, which is very difficult to do for any yarn company. So imagine if the yarn utilization goes up to 90%, you will have a really good top line and bottom line both happening. So the modernization maintenance part because of our mill being old was part of the reason why all of these investments have happened. That is done with. Now you will see significantly every investment that is happening leveraging into top line and bottom line.

Yes. So as an investor all for growth capex, but only input is that it's not visible in your top line, and I hope that this will get corrected soon in coming years.

Thank you for your patience and being with us, but we will be endeavoring to show results in the next few quarters.

Next question is from the line of Mohit Oberoai from EJ Capital.

Am I audible?

Yes, go ahead, go ahead.

Okay. So I had a couple of questions. First is that you have maintained FY27 revenue guidance of INR1,450 crores to INR1,500 crores despite only 4% Y- o-Y growth in Q1. So what gives you confidence in achieving this target? And how much growth do you expect in the second half of the year?

Yes. I mean, so firstly, if you look at the comparative results of Q1 from last financial year to this year, you'll see that it's not just a top line, but the bottom line has improved significantly. The major reason for the top line not increasing has been the labor availability in the first quarter in our spinning business and some dispatches being held back in the garment. That is already going to adjust in quarter 2 to a large extent. And you will see this probably in the Q2 and Q3, we should be able to cover up significantly and end with a very good quarter. So this is like -- I mean, we are leading up to the last quarter being the most important for us, which it always has been. But you will see improvements in quarter 2, quarter 3 and quarter 4. That's why we are maintaining the guidance, order book position for garments is almost full up to December end. Our fabric order book position is also quite good and is showing almost orders up to November end. So based on the order book position, we are giving you this kind of a guidance.

Okay. So my second question is based on that only, that you indicated the Garment division is fully booked through November. Does this provide sufficient visibility to achieve FY27 guidance despite the weak first quarter?

Yes. I think that's what Ravi ji was saying that one is we will have a little spillover of shipments, which will come into this quarter because of the logistics concerns with the West Asia crisis. So there will be some spillover of goods produced in the first quarter, which will go into the second quarter. And overall, the order book is very healthy. So we are expecting in garments probably a INR100 crores quarter for the next 3 quarters, which will take us close to what we were expecting around INR375 crores, INR380 crores to finish plus whatever export incentives, etc.

We have our next question from the line of Akshay Satija from Alpha Invesco.

Sir, one last final follow-up. Is anything on the Surat facility? Any movement there?

Yes, Akshay, welcome back. I'll let Shaleen answer that.

Yes. Thanks, Akshay. Yes, we are eagerly awaiting, obviously, to have that facility back in terms of available for operations. I'm happy to report that we

have gotten all of the approvals from GIDC and a no objection certificate and recommendation for de -notification from GIDC. So that was the first big hurdle. Now since we have that from the developer, our second job now, which we are currently doing is getting the no due certificate from customs to pay all of the duties and bring them into domestic tariff area. The last job will be the debonding part, which we have to take with the SEZ authorities. And we expect that these remaining 2 parts should get done within the next 3 months, hopefully, and definitely within the next 4 to 5 months. So we're hoping that we should have the facility for use in DTA by November or December and operational for start in, let's say, April of '27.

So the main result of this debottlenecking and availability of the building and capacity in Surat will be really in FY27, '28.

Okay. Okay. And all the machinery and all that we had earlier, so we'll be setting up those machineries or we need to modernize them and we need to spend some more on that also?

So when we will look at restarting Surat, we would look at it in a way of investing fresh into Surat and completely making a modern plant with new machinery. And that would give us additional runway to grow the business an additional INR200 crores with an approximate investment of about INR50 crores.

We have our next question from the line of Nishant from Green Portfolio.

Sir, I want to ask one thing. If I step back and look at the last 10 years, sir, the company is basically the same size it was in FY19. Revenue, this is around INR1,350 crores, still below your FY23 peak of INR1,500 crores, which works out barely 1% growth a year over the entire decade. Now since around FY21, you have put in close to INR500 crores for capex, almost equal to your market cap. And your debt has climbed back to almost INR500 crores to fund it. But despite all that spending, your operating margin this year FY26 is only about INR9 crores, INR9.5 crores, still below the 11%,

12% of the year you were earning before the capex, like nowhere near the 14% you had earned in FY23 peak. And now sir, I'll give you the full credit. The product mix has generally improved with fabric and garments taking a bigger share. But here's my honest question. After all these money and a better mix, the company is no bigger and no more profitable than i t was years ago. So what is generally different this time versus the last deacde? I want to know this, sir?

Yes. I mean, so if you look at the decade ago, we had the joint venture with the French company that got dissolved. And we had made a lot of investment then into various spinning capacities, fabric capacities and finishing capacities, because of the dissolution of the joint venture, we lost those sales. So over this last decade, we have had to build back. And we've been able to do that, I think, very successfully now. We have, in fact, a much better product mix and a much better company than what it was a decade ago. So the potential to come back much stronger has happened based without any joint venture, without any particular partn ership, which we have to share. And I think that your potential lies now in the fact that the market in India where you're replacing the Chinese products has matured to a level where most of the importers of the Chinese goods are coming to us and looking at us as the preferred source in the domestic market. And even the export market with the changes that has happened as we spoke about in the FTAs that the country has done, that has helped us enormously to be able to now get this potential to grow in our Garment business. So I think the scenario is completely changed from 10 years ago to what it is now and the potential of what we see ahead in the next 10 years will be completely different from what we had in the past 10. I think there's really no comparison.

And I'd just like to add one thing from a garment perspective, and that is if we look maybe going back 6, 7 years, 8 years, we were probably 80% reliant on domestic business and only about 20% on export. Since then, particularly in the last 2, 3 years, whe re we've made a concerted effort on bringing on and building relationships with larger export customers. And now we've reached a

situation where about 60% export and 40% domestic. But I wouldn't be surprised at the end of the year if we're even inching towards 70% of export. And the target is to even get all the further growth to come with by leveraging these FTAs, by leveraging the relationship with larger customers. And I think when we are exporting, we have a better chance of improving our earnings. So I think on the garment front, I'm hopeful that with this shift towards moving more with a greater focus towards exports, our realization and earnings will be better.

Okay. So sir, how much we can expect so your exports would increase your margin 1%, 2%, 3%. If you can give us the hint on it?

If I would put it this way, I think in domestic, if we are dependent only in domestic today, it's very difficult to survive even. You're probably losing a little bit of money on each order. And with garment, at least you'll have the opportunity to earn 10%, 12% EBITDA, and that will be our target. So from a situation of probably coming of low 3%, 4% EBITDA, we will probably move higher to 8%, 10% EBITDA and possibly even push to 12%.

The next question is from the line of Nirbhay Mahawar from N Square Capital.

Yes. This is just a feedback on our Garment division's performance. While I appreciate all the hard work company is putting in, but somehow, I feel that we are lacking aggression. And in the similar time frame in last 4, 5 years, there are enough companies, enough number of domestic players who have scaled up operation and delivered well in domestic as well as international front. So I hope we look into our competitors and try to learn some lessons from them.

Thank you. And I want to assure you that we're on that journey. It has taken a bit longer. And I think the shutting down of the Surat facility, which was a conscious decision so that we could move into a DTA, which would allow us more flexibility and better earnings overall. Once that opens up, we'll have the pathway with limited, what you call, capex required and the potential for greater growth and runway. And we will completely optimize our utilization of our existing facilities in Daman this year. So we are looking at closing close to about INR400 crores this year. As I mentioned before, the order book is looking very healthy, and we're looking at

least the next 2 quarters booked out at INR100 crores. I expect the same for the last quarter as well. And we have good plans for further growth in the coming year as well.

I'd like to also say that Shaleen has joined the investor call for the first time this time. And going forward, he will be there for all of the other calls as well so that he can address all your concerns on the Garment business directly. And we are well apprised that this is the growth area with a lot of potential to it, and I'm sure we'll be working very hard towards achieving it.

The next question is from the line of Palkesh Jain from Transparent Value.

So a couple of questions from my side also. So first question is like what percentage of your current exports are from U.K.? And what share do you expect the U.K. market to contribute over the medium term?

So we'll break up the exports to the U.K. exports in terms of fabric to different destinations, including other garment factories in India, Vietnam and even Bangladesh. I think the fabric part of our total business exposure to the U.K. is about INR70 crores, INR80 crores on an annual basis. On the garment part, Shaleen can tell you more how much we are doing.

On the garment, currently, it is pretty moderate. It's about INR20 crores to INR25 crores. But we have now got a good inquiry pipeline, and we expect this to double next year to at least INR50 crores. And then thereby, there will be a good possibility of further increasing it in the years to come.

One more question. So beyond the U.K., how do you see sourcing trends evolving across Europe and the U.S.?

Yes. Again, on the garment side, we feel very good about the growth prospects in the EU. We've got 2 anchor customers in the EU already engaging with us, almost close to about INR100 crores worth of revenue between Mango and Celio. And we have already onboarded a giant like C&A, and we've started trial orders with them this year. So I expect that there will -- plus we have some other customers in Europe, and there will be good growth prospects going forward in Europe, and we're

hopeful that this EU operationalization should happen by end December, early January, fingers crossed.

Yes. And then on the fabric front as well, there is not just growth in our own Garment division, but there is growth happening across the country in garment capacity. So various kinds of garments even of the type that we don't make because we specialize in pants and jackets. But our fabric portfolio now has moved into womenswear dress materials and even certain specialized shirting. So the fabric forward FTA will make it very useful for people to take fabric from India and make garments in India. Only then will they really get the benefit of the zero duty into the U.K. This will give us a big thrust.

As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you.

Right. So thank you, everyone, for a very interesting and useful question-and- answer session. To conclude, I'd like to thank all of our stakeholders for their continued trust and confidence in Banswara Syntex. Our focus remains on executing our strategy wi th consistency, improving our product mix, strengthening our customer relationships and improving our operational efficiencies across the business. We believe the opportunities ahead are significant and the strong foundation we have built in with that, we remain confident of delivering the sustainable growth to create long -term value. Thank you, everyone, and look forward to meeting you again in the next conference call.

Thank you, sir. On behalf of Banswara Syntex Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.