Sanathan Textiles Limited’s Punjab ramp lifted Q2 PAT 157%

Sanathan Textiles Limited reported Q2 FY27 consolidated profit after tax of Rs 61.2 crore, up 157.1% from Q1 FY27, as its Punjab facility ramped up volumes and improved fixed-cost absorption. Consolidated revenue rose 35.2% sequentially to Rs 1,804.0 crore and EBITDA increased 43.2% to Rs 154.7 crore.

How did the Punjab ramp-up change Sanathan Textiles’ Q2 results?

The Punjab ramp-up lifted Sanathan Textiles’ consolidated sales volume to 1.22 lakh MTPA in Q2 FY27 from 0.96 lakh MTPA in Q1 FY27, while production increased to 1.16 lakh MTPA from 1.05 lakh MTPA. Management said the facility was contributing meaningfully to volumes, alongside improved utilisation across operations and higher selling prices.

Revenue from operations rose by Rs 469.3 crore sequentially, from Rs 1,334.7 crore in Q1 FY27 to Rs 1,804.0 crore in Q2 FY27. Management specifically attributed the increase to higher selling prices and the Punjab facility’s ramp-up. The sales gain was larger than the 22.0% sequential revenue increase in standalone operations, where revenue reached Rs 992.1 crore.

Why did Sanathan Textiles’ profit grow faster than revenue?

Sanathan Textiles’ profit grew faster than revenue because management linked the Punjab ramp-up to higher volumes, better fixed-cost absorption and improved margins. EBITDA rose by Rs 46.7 crore quarter on quarter, while PAT increased by Rs 37.4 crore, with EBITDA margin expanding 50 basis points to 8.6% and PAT margin increasing 160 basis points to 3.4%.

The rise in profitability occurred despite higher depreciation and finance costs. Consolidated depreciation was Rs 36.6 crore in Q2 FY27 versus Rs 34.7 crore in Q1 FY27, while finance cost increased to Rs 42.0 crore from Rs 38.6 crore. Even after these charges, profit before tax more than doubled to Rs 80.6 crore from Rs 38.3 crore, and tax rose to Rs 19.4 crore from Rs 14.5 crore.

On a year-on-year basis, Q2 FY27 consolidated revenue increased 120.5% from Rs 818.0 crore, EBITDA increased 145.0% from Rs 63.2 crore and PAT increased 204.5% from Rs 20.1 crore. EBITDA margin was 90 basis points above Q2 FY26’s 7.7%, while PAT margin was 90 basis points above 2.5%, showing that the reported improvement was not solely a sequential recovery.

How did consolidated performance compare with standalone operations?

Consolidated operations outpaced standalone operations in Q2 FY27, reflecting management’s reported contribution from the Punjab facility. Consolidated revenue was Rs 1,804.0 crore and EBITDA was Rs 154.7 crore, compared with standalone revenue of Rs 992.1 crore and EBITDA of Rs 83.8 crore. The consolidated EBITDA margin improved sequentially, whereas the standalone EBITDA margin declined.

Standalone revenue increased 22.0% sequentially from Rs 813.1 crore, but standalone EBITDA declined 11.7% from Rs 94.9 crore to Rs 83.8 crore. Sanathan Textiles said standalone EBITDA fell as spreads moderated and operating expenses increased quarter on quarter, even though standalone revenue was supported primarily by higher selling prices.

The contrast also extends to net profit. Consolidated PAT rose from Rs 23.8 crore in Q1 FY27 to Rs 61.2 crore, while standalone PAT declined from Rs 64.9 crore to Rs 58.7 crore. Standalone PAT margin fell 210 basis points to 5.9%, versus a 160-basis-point expansion in the consolidated PAT margin to 3.4%, consistent with management’s explanation that Punjab’s operational ramp improved group-level absorption and margins.

What capacity remains at the Punjab facility?

Sanathan Textiles has commissioned Phase 1 of its Punjab polyester yarn facility at 700 tonnes per day, or 255,500 MTPA. Phase 2 is listed at 250 tonnes per day, or 91,250 MTPA, which would take the Punjab site’s total stated capacity to 950 tonnes per day and 346,750 MTPA.

The presentation does not disclose a commissioning date, capital cost or expected financial contribution for the 91,250 MTPA Phase 2. It identifies the Wazirabad, Punjab site as an 80-acre freehold facility located near North Indian markets, where it cites a pre-existing polyester-yarn market of 1 million MTPA and decade-long customer relationships.

Management presents the site’s operating rationale as lower transport and associated costs, shorter delivery times, higher automation in production, packing and storage, and use of agricultural waste as solid fuel for heating. The company also states that Punjab more than doubles polyester capacity, while its group-wide installed capacity is 488,250 MTPA across polyester, cotton and technical-textile yarns.

What does the September 2026 balance sheet show?

Sanathan Textiles’ consolidated balance sheet showed total assets of Rs 5,024.5 crore at September 2026, up 6.6% from Rs 4,713.7 crore in March 2026. Plant, property and equipment including capital work in progress increased by Rs 107.5 crore to Rs 3,177.0 crore, while total current assets rose 12.4% to Rs 1,715.3 crore.

Working-capital line items increased alongside the revenue expansion. Inventory rose 7.8% to Rs 816.3 crore and trade receivables rose 21.4% to Rs 263.4 crore between March and September 2026. Trade payables increased 26.1% to Rs 1,376.1 crore, while short-term borrowings decreased 41.0% to Rs 126.4 crore and long-term borrowings increased 1.0% to Rs 1,285.2 crore.

Conclusion

Sanathan Textiles’ Q2 FY27 consolidated results indicate a material change in operating contribution from Punjab: revenue rose 35.2%, sales volume reached 1.22 lakh MTPA and PAT increased 157.1% sequentially. Management attributed the profit increase to the plant’s ramp-up, higher volumes, better fixed-cost absorption and margin improvement, while higher selling prices also supported revenue.

The next disclosed capacity milestone is Punjab Phase 2, listed at 91,250 MTPA in addition to the commissioned 255,500 MTPA Phase 1. The presentation does not provide a commissioning timetable or project cost for Phase 2, leaving execution timing and capital requirements unresolved in future company updates.