RSWM: brands associated: JCPenney, H&M, Zara, Levi’s, Wrangler, Diesel, Lee, Spykar, Hilfiger denim, and many more

1.  Video: https://youtu.be/lP7QJWjqzmQ?si=6PqORSfmeMlFj98v

2. Video: https://youtube.com/shorts/lxFvhNc22s0?si=_ZNO2hAil7Ki4XZJ

Textile story is already very big in India and can grow more in future if Government provides further support. My theme says, that this sector can get re rated as well. 

Huge capex plans for future plus decent valuations is a magical sauce that one can aim to find while screening companies

Performance Overview: 

  • FY23 proved to be a mixed bag for the Textile Industry, and RSWM Ltd. experienced a similar trajectory. The year began on a strong note with a positive Q1, but the industry faced significant challenges in Q2 and Q3, leading to a steep decline. However, there were signs of recovery in Q4
  • Business Environment Challenges: Geopolitical tensions and an unprecedented increase in cotton prices presented a highly challenging business environment over the past nine months. These factors created obstacles for RSWM Ltd. and the industry as a whole. 
  • Impact on Textile Exports: Sluggish demand from overseas markets, particularly the United States and Europe, had an adverse effect on textile exports during FY23. Export volumes, which account for 22% of the industry, witnessed a decline of 14% year-on-year. 
  • Yarn Exports and Domestic Market Shift: Yarn exports were hit particularly hard, experiencing a significant drop of around 46% year-on-year in the first nine months. This decline forced RSWM Ltd. to redirect its capacities toward the domestic market to mitigate the impact.
  • Capacity Utilization and Financial Stability: Despite the challenging environment, RSWM Ltd. successfully utilized its capacities fully. This strategic move helped the company navigate the downturn and maintain a robust financial position.
  • Stabilization of Raw Material Prices: Raw material prices stabilized in the later part of the year, bringing some relief to RSWM Ltd. and other players in the industry. 
  • Optimism for the Future: RSWM Ltd. remains optimistic about the coming year and is committed to continuing its strategic expansion plans. The company believes in its ability to deliver strong results and value to its stakeholders. 
  • Strengthening Financial Position: To bolster its financial position, RSWM Ltd. infused ₹235.51 Cr. into the business through a right issue of equity shares. This move demonstrates the company's commitment to its growth trajectory. 
  • Wide Market Reach and Product Portfolio: RSWM Ltd. boasts an extensive outreach across domestic markets and more than 70 countries worldwide. With a diverse product basket and a strong workforce, the company is well-positioned to navigate challenges and capitalize on opportunities.  
  • FY 2023
    • EBITDA Margin(%):  9.0% Vs  12.2% 
    • PAT :  110 Vs  240 
    • Net Debt:  1,151 
    • RONW :  9.7% Vs  27.3%
    • Revenue :  3,789 Vs  3,789  
  • Top brands associated with us: JCPenney, H&M, Zara, Levi’s, Wrangler, Diesel, Lee, Spykar, Hilfiger denim, and many more 
  • Capex
    • Capex of ₹315 Cr during FY23 for the expansion of spinning capacity at Lodha, Banswara – The project is underway and shall be completed in FY24
    • The company has invested around ₹410 Cr in the expansion of Denim, Cotton Mélange Yarn, Knits Business, and Modernization & Balancing equipment across all units    
  • RSWM: Comments
    • Commenting on the results, Mr. Riju Jhunjhunwala, Chairman & Managing Director, and CEO of RSWM Limited said, “The Indian Textile Industry encountered a few bumps in the road in 2022 due to unpredictable geopolitical events and variable raw material prices. The demand from the USA and Europe, two of our major consuming markets, took a hit due to economic trends, and the domestic market wasn't immune to the global scenario, leading to less optimism for the rest of the fiscal year
    • Closely tracking Govt Policies RoDTEP Scheme (Remission of duties and Taxes on Export Products) which will enhance Indian exports competitiveness across the globe
    • It is likely to change the entire value chain for exporters

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