Sonaselection manufacturing reached 81.5% of FY26 revenue

Sonaselection generated 81.5% of revenue from operations through manufacturing in Fiscal 2026, compared with 11.28% in Fiscal 2024. Manufacturing revenue rose to Rs 421.294 crore from Rs 13.65 crore, shifting the business towards direct raw-material procurement, inventory, quality assurance and customer acceptance for its own products.

How has Sonaselection’s manufacturing revenue mix changed?

Sonaselection has moved from a job-work-led model to one led by manufacturing and sale of its own products. Manufacturing generated Rs 421.294 crore of the company’s Rs 516.949 crore revenue from operations in Fiscal 2026, while job-work generated Rs 89.441 crore and ready-made garments, or RMG, generated Rs 6.214 crore. Manufacturing represented 81.5% of revenue, job-work represented 17.3%, and RMG accounted for 1.2%.

The change took place over two fiscal years. In Fiscal 2024, job-work accounted for Rs 107.329 crore, or 88.72%, of revenue from operations, while manufacturing contributed Rs 13.65 crore, or 11.28%. By Fiscal 2025, manufacturing revenue had increased to Rs 220.787 crore and 69.88% of revenue, while job-work declined to Rs 95.165 crore and 30.12%. Total revenue from operations rose from Rs 120.979 crore in Fiscal 2024 to Rs 315.952 crore in Fiscal 2025 and Rs 516.949 crore in Fiscal 2026.

The increase in revenue was principally manufacturing-led. Manufacturing revenue increased by Rs 407.644 crore between Fiscal 2024 and Fiscal 2026, while job-work revenue declined by Rs 17.888 crore over the same period. Sustaining the revised mix therefore depends more on Sonaselection developing demand for manufactured products than on retaining the earlier level of job-work orders.

What operating exposure does Sonaselection manufacturing create?

Sonaselection’s manufacturing model requires it to procure yarn and greige fabric, maintain inventory, operate quality-assurance systems and establish customer acceptance for manufactured products. Greige fabric is unfinished fabric before processing. The company identifies these activities as transition risks because the required investments may not generate the anticipated returns.

Yarn and greige fabric are Sonaselection’s primary manufacturing raw materials, and the company does not typically enter long-term fixed-price contracts with suppliers. It sources these inputs from suppliers across key producing regions in India. This arrangement provides procurement flexibility, but leaves production schedules and costs exposed to supplier delivery delays, quality inconsistencies, operating disruptions and price spikes.

Cotton-yarn prices can be affected by global supply-chain disruptions, demand variation, input-cost pressure, droughts, floods and government procurement policies, according to the company’s disclosure. Higher procurement costs during peak seasons could increase working-capital requirements, borrowings and interest outflows. The effect on margins depends on whether Sonaselection can align selling prices with input costs in the price-sensitive textile market, where it says its ability to pass on increases is limited.

Sonaselection reported no material raw-material supply disruptions during Fiscal 2024, Fiscal 2025 or Fiscal 2026. The dependency remains material because manufacturing represented Rs 421.294 crore of Fiscal 2026 revenue from operations, compared with Rs 13.65 crore in Fiscal 2024. Sonaselection also relies on third-party logistics providers to transport incoming raw materials and outgoing finished goods.

Can Sonaselection’s Bhilwara facility support the manufacturing mix?

Sonaselection’s Bhilwara manufacturing facility recorded actual production of 68.19 million metres per annum, or MMPA, in Fiscal 2026 against installed capacity of 82.44 MMPA, resulting in capacity utilisation of 82.71%. Installed capacity measures potential annual processing capacity, while actual production records output in the reported fiscal. The Fiscal 2026 utilisation rate was below Fiscal 2024’s 89.50% because installed capacity increased.

The facility’s installed processing capacity was 54.00 MMPA until it increased by 28.44 MMPA under a consent-to-operate letter dated April 23, 2024. Commercial production using the enhanced capacity began in July 2024. In Fiscal 2025, actual production was 58.94 MMPA against 82.44 MMPA of installed capacity, and utilisation was 78.24%, calculated using the expanded capacity.

Fiscal 2026 production was 9.25 MMPA above Fiscal 2025 output, but the facility had 14.25 MMPA of unused installed capacity. The additional capacity can support higher volumes only if demand rises accordingly. Equipment breakdowns, labour disputes, natural calamities or industrial accidents at the Bhilwara facility could interrupt output, while inadequate demand could increase fixed costs per unit and reduce operating efficiency.

Does job-work customer concentration still matter after the shift?

Job-work customer concentration remains relevant because Sonaselection generated Rs 89.441 crore, or 17.3% of Fiscal 2026 revenue from operations, through that vertical. Its five largest job-work customers contributed Rs 37.043 crore, equal to 41.41% of Fiscal 2026 job-work revenue. The largest customer contributed Rs 14.827 crore, or 16.58%, of job-work revenue.

The top-five share increased from 28.44% in Fiscal 2025 and 35.98% in Fiscal 2024. Combined revenue from these five customers was Rs 27.069 crore in Fiscal 2025 and Rs 38.627 crore in Fiscal 2024. The higher Fiscal 2026 concentration percentage occurred alongside a smaller job-work revenue base, leaving the vertical dependent on a limited group of customers even as company revenue moved towards manufacturing.

Sonaselection states that a reduction or discontinuation of orders by significant job-work customers could affect its results if it cannot replace those customers or diversify the customer base. The manufacturing strategy creates a separate requirement to develop and market products, establish customer acceptance and compete with established participants. The transition therefore requires both continued job-work demand and repeat demand for manufactured products.

Conclusion

Sonaselection’s Fiscal 2026 revenue profile was predominantly manufacturing-based, with Rs 421.294 crore and 81.5% of revenue from operations coming from that vertical. This differed materially from Fiscal 2024, when job-work represented 88.72% of revenue. The business now carries more direct exposure to yarn and greige-fabric costs, inventory, logistics, capacity utilisation, quality systems and customer acceptance for manufactured products.

The next indicators are whether production continues to absorb the 82.44-MMPA Bhilwara capacity, whether raw-material costs can be aligned with selling prices, and whether customer acceptance supports manufacturing revenue. Sonaselection has also disclosed a plan to expand downstream through wholly owned subsidiary Sionnah Enterprises Private Limited, incorporated on July 1, 2025, for the RMG segment, where Sonaselection says it has limited to no experience.