Sangam (India) Limited: Weaving a Stronger Future with Robust Q2 FY26 Performance

Sangam (India) Limited, a prominent player in the Indian textile sector, has reported a robust financial performance for the second quarter of Fiscal Year 2026 (Q2 FY26), demonstrating resilience and strategic foresight amidst a dynamic market environment. The company's revenue surged by 16% year-on-year to ₹785 crore, driven by strong domestic demand and enhanced operational efficiency. This impressive top-line growth was complemented by a significant improvement in profitability, with EBITDA witnessing a sharp 32% jump to ₹76 crore. The net profit after tax (PAT) saw an extraordinary rise of 317% year-on-year, reaching ₹23 crore, underscoring the effectiveness of its integrated business model and strategic initiatives.

The company's performance in Q2 FY26 reflects a concerted effort to optimize its product mix and leverage its extensive manufacturing capacities. The yarn segment, comprising PV Yarn and Cotton Yarn, contributed a substantial portion of the revenue, accounting for 23% and 29% respectively. Denim Fabric contributed 28%, Woven Fabric with processing 17%, and Garment 3%. This diversified portfolio allows Sangam to cater to varied fiber needs and fabric applications, ensuring a balanced revenue stream. Management noted that the completion of their extensive capital expenditure cycle has brought all capacities online, enabling volume growth and improved utilization across verticals. The moderation of raw material prices, particularly cotton, after a prolonged downward trend, also contributed to better realizations and margin expansion.

Strategic Thrusts and Operational Excellence

Sangam (India) Limited is not just focusing on immediate gains but is strategically positioning itself for long-term sustainable growth. A key initiative is the strategic backward integration for recycled polyester fibre production. By converting PET bottle flakes into recycled polyester fibre, the company ensures a stable supply, reduces input costs, and strengthens its competitiveness. This move also aligns with global brands' recycled mandates, unlocking stronger export potential and reinforcing its ESG commitment. The installed capacity of 45 TPD (16,020 MT per annum) is expected to meet approximately 50% of its daily polyester fibre requirement, projecting annual savings of ₹15 crore at the EBIT level.

In a bid to enhance operational efficiency and sustainability, Sangam is boosting its renewable energy footprint. An additional 12 MW of renewable energy capacity is proposed, with commissioning expected by December 2025. This project, requiring a total investment of ₹11.42 crore, is projected to generate annual savings of ₹10 crore. This initiative is particularly timely, as it will help mitigate the rising financial strain from an additional ₹1/unit cess in Rajasthan from October 2025. The company aims to increase its renewable energy consumption from the current 15% to 70-75% over the next 15-18 months.

Market Dynamics and Future Outlook

Despite global headwinds such as US tariffs impacting the textile garment business, Sangam's revenue concentration from the US remains low, at less than 1% of total sales, insulating its earnings from tariff-led volatility. The company benefits from strong geographic diversification, with steady demand from non-US regions offsetting any regional weakness. Management expects revenue to grow between 12% to 15% annually, targeting a top line of INR3,200 crore to INR3,300 crore for the current fiscal year. The company also projects a debt reduction of approximately INR350 crore over the next three years, assuming no new major capital expenditure.

Sangam's commitment to building an integrated textile business is evident in its focus on innovation, agility, and sustainable margin improvement. The company's strong leadership, well-structured board, and globally recognized accreditations, including being a 'Four Star Export House', reinforce its market position. The management's balanced commentary, acknowledging both challenges like historically low ROE and opportunities in growing markets, instills confidence in its strategic direction and execution capabilities.

Conclusion: A Resilient Growth Trajectory

Sangam (India) Limited's Q2 FY26 performance underscores its resilient growth trajectory, driven by operational discipline, strategic investments, and a diversified market approach. The company's focus on value-added products, sustainable practices, and efficient capital allocation positions it well to capitalize on emerging opportunities in both domestic and export textile markets. With a clear vision for enhancing productivity, reducing costs, and maximizing high-margin products, Sangam is poised for continued growth and value creation for its stakeholders.