Ambika Cotton Mill Q1 FY27 earnings call

Cotton yarn / Spinning

FY25-26 revenue ₹780.95 cr with exports recovering to ₹545.5 cr (72.9% of turnover). Q1 FY27 revenue ₹257.92 cr, PAT ₹25.70 cr on capacity addition and demand revival.

FY26 revenue ₹780.95 cr · FY26 PAT ₹71.56 cr · FY26 EPS ₹125.00 · Q1 FY27 revenue ₹257.92 cr · Q1 FY27 PAT ₹25.70 cr · Q1 FY27 EPS ₹44.89 · FY26 export revenue ₹545.5 cr (72.9%) · Total spindles 120,816 · FY26 capex ₹69.96 cr · FY26 operating cash flow ₹228.25 cr · Renewable energy 27.4 MW wind + 8.33 MW solar

Outlook: Q1 FY27 performance indicative of resurgence in global demand; Unit 4 modernisation by March 2027 to improve productivity and automation, funded from internal accruals.

FY 2025-26 Financial Performance · P. V. Chandran (Chairman & Managing Director)

• Revenue from operations rose to ~₹780.95 cr in FY26 from ₹702.07 cr in FY25, growth of ~11%.
• Profit after tax increased to ₹71.56 cr from ₹65.74 cr, up ~8.85%.
• Earnings per share rose from ₹114.83 to ₹125.00.

Export Recovery · P. V. Chandran (Chairman & Managing Director)

• Export turnover recovered to ~₹545.5 cr, accounting for ~72.9% of total turnover.
• Recovery is significant as it follows a decline in the previous financial year.
• Reflects strength of customer relationships and ability to serve quality-, consistency-, traceability- and sustainability-focused international markets.

Core Philosophy & Customer Strategy · P. V. Chandran (Chairman & Managing Director)

• Core principle: build and sustain a strong balance sheet — solvency is the prime motive, providing freedom to act through cycles.
• Does not chase volume; sells differentiated, premium yarn to demanding international brands.
• Customer base is highly tenured — ~50% of clients have relationships beyond 15 years; several span 1–2 decades.
• Bale-to-yarn traceability is increasingly differentiating Ambika with global textile brands.

Capacity Expansion & Modernisation · P. V. Chandran (Chairman & Managing Director)

• FY26 capex ~₹69.96 cr, entirely from internal accruals.
• Spindle capacity rose from 108,288 (FY25) to 114,336 (FY26), with 6,480 additional spindles commissioned on 26 Sept 2026 taking total to 120,816.
• Unit 4 modernisation: ₹135–138 cr investment to replace ~43,000 spindles with 45,000 new-generation spindles; targeted operational date March 2027; also fully internally funded.
• Objective is productivity, automation, process control, consistency and lower manpower — not just capacity addition.

Financial Strength & Working Capital · P. V. Chandran (Chairman & Managing Director)

• Company remains debt-free; generated ~₹228.25 cr of net cash from operating activities in FY26.
• Cash flow supports planned investments and preserves financial flexibility.
• Maintains adequate cotton inventory to manage seasonal raw-material supply and demand spikes.

Sustainability & Renewable Energy · P. V. Chandran (Chairman & Managing Director)

• 27.4 MW of installed wind power capacity and 8.33 MW of rooftop solar, primarily for captive consumption.
• Approximately 82–84% of total energy requirement met from renewable sources.
• Estimated 41,011 tonnes of CO2 emissions avoided in FY26 via renewable energy.
• Evaluating Battery Energy Storage Systems (BESS) subject to technical and commercial feasibility.

Q1 FY 2026-27 Early Indications · P. V. Chandran (Chairman & Managing Director)

• Q1 FY27 revenue from operations rose to ₹257.92 cr vs ₹191.98 cr in Q1 FY26.
• Q1 FY27 PAT rose to ₹25.70 cr vs ₹15.92 cr YoY.
• Q1 FY27 EPS rose to ₹44.89 vs ₹27.81 YoY.
• Management views this as evidence of global demand resurgence combined with capacity expansion, but remains watchful of cotton prices, currency, competition and global economic conditions.

Capital Allocation Philosophy · P. V. Chandran (Chairman & Managing Director)

• Investments targeted at productivity, technology, product differentiation and long-term competitiveness.
• Unit 4 modernisation cited as the prime example — investment in quality, productivity and efficiency, not expansion for its own sake.
• Will continue to maintain a strong balance sheet; growth will not come at the cost of financial discipline.

Shareholder Returns · P. V. Chandran (Chairman & Managing Director)

• Board has recommended a final dividend of ₹37 per equity share (face value ₹10) for FY26, subject to shareholder approval.
• Total payout of ₹21.18 cr; payout ratio of ~29.60%.
• Objective is to balance shareholder returns, reinvestment, and preservation of financial strength.

People & Governance · P. V. Chandran (Chairman & Managing Director)

• Acknowledged contribution of employees, customers, suppliers, bankers, auditors, advisors and business partners.
• Reaffirmed commitment to sound corporate governance, regulatory compliance, transparency and responsible stewardship.

Looking Ahead · P. V. Chandran (Chairman & Managing Director)

• Forward focus areas: technology-led modernisation, premium and value-added products, customer-specific innovation, operational efficiency, enduring export relationships, renewable energy, disciplined capital allocation, long-term value creation.
• Company enters next phase with strong balance sheet, established customer relationships, increasing capacity and clear focus on productivity and value addition.