Sanathan Textiles Punjab plant hits 96% use in FY26

Why the Punjab ramp-up matters

Sanathan Textiles’ greenfield facility in Punjab has moved from commissioning mode to near-full running, with the company citing 96% capacity utilisation at the site. The operational milestone is important because it shifts the plant’s role from incremental supply to a key regional supply hub for north India. The company also links the improved operating efficiency to a more insulated polyester feedstock supply chain at a time when the West Asia conflict has disrupted global logistics for raw materials.

Management commentary around the quarter also points to demand absorption for specialised polyester yarns even as input-cost inflation continues. The plant’s output and proximity to customers in key garment clusters adds a second lever: faster deliveries and lower logistics friction compared with shipping material from western India.

96% utilisation and the polymerisation line performance

The Punjab facility’s near-full utilisation is anchored by a continuous polymerisation line that started at 350 tonnes per day (TPD). During Q3 FY26, Sanathan said the plant’s polymerisation capacity scaled from 350 metric tonnes per day (MTPD) to 450 MTPD, reflecting a 25% increase during the quarter. Paresh Dattani, Chairman and Managing Director, said the Punjab facility progressed beyond initial commissioning in Q3 FY26 and turned EBITDA-positive in the quarter.

The company has also communicated a Phase I target of 700 MTPD, with multiple references to achieving this by the end of Q4 FY26 and reaching full Phase I potential in Q1 FY27. Separately, Sammir Dattani, Executive Director, has linked the plant’s performance to demand stability for specialised polyester yarns despite broader inflationary pressures.

Lead-time advantage for Ludhiana and Panipat

Sanathan says the Punjab plant creates a logistics advantage for major north Indian garment and textile clusters. The company estimates lead times to Ludhiana and Panipat are lower by about 30% compared with traditional shipments from western India. This matters operationally because shorter replenishment cycles can reduce working capital for customers and make the supplier stickier for repeat orders.

The company also positions the Punjab unit as a way to reduce exposure to external shocks in global polyester feedstock movement. With higher local availability and improved asset utilisation, management has presented the facility as a more resilient node in the firm’s supply chain.

Q3 FY26 results: revenue growth, but consolidated loss

For Q3 FY26, Sanathan reported consolidated revenue from operations of ₹1,078.7 crore, up 31.9% quarter-on-quarter and 45.1% year-on-year. However, it posted a consolidated net loss of ₹4.8 crore in the quarter, versus a profit of ₹34.2 crore in the same period last year, attributing the decline largely to initial Punjab scale-up costs and one-time employee-related expenses.

On the standalone side, revenue from operations increased to ₹768.07 crore in Q3 FY26 from ₹741.13 crore in the corresponding quarter of the previous year. Standalone PAT rose 2.0% to ₹38.1 crore. For the first nine months of FY26, consolidated revenue was ₹2,642 crore compared with ₹2,266.4 crore in the prior-year period.

Cost inflation and pricing actions

The company has flagged inflationary pressure across raw materials and operating costs. It said polyester prices rose 20% to 25%, while other costs increased 8% to 10%. Against this, Sanathan said it took price hikes to manage margin pressure.

In another quarterly context, the company cited approximately ₹11 crore in start-up costs tied to the new Punjab facility, alongside higher finance and depreciation expenses. These items weighed on near-term consolidated profitability even as volumes and revenues improved.

Phase I and Phase II: where capacity is headed

Sanathan’s published targets show a clear trajectory for Punjab. The facility moved to 450 MTPD in Q3 FY26 and is targeted to reach 700 MTPD by end-Q4 FY26, with full Phase I potential referenced for Q1 FY27. The broader growth plan extends to Phase II, with stated intent to further expand polymerisation capacity.

Within the provided disclosures, Phase II has been described in two ways: management has referenced an expansion to 950 MTPD after Phase I, while another guidance note mentions Phase 2 “to 900 TPD” starting end-FY27. In addition, one account describes Phase II as aiming to double daily output to 700 TPD from the initial 350 TPD line, reflecting the transition from commissioning levels to Phase I design capacity.

Revenue guidance anchored to utilisation and expansion

Management expectations on revenue are framed around Punjab stabilisation and higher utilisation across the network. One guidance set pegs annual revenue at ₹4,000 crore to ₹4,300 crore, with the Punjab plant contributing roughly ₹1,300 crore. Another management outlook sets FY27 consolidated revenue at ₹5,700 crore and expresses confidence in achieving double-digit EBITDA.

For Q4 FY26, the company expects consolidated revenue of ₹1,200 crore and EBITDA of ₹90 crore to ₹100 crore. Another management commentary targets ₹5,800 crore to ₹6,000 crore of revenue for FY27 with an 11% EBITDA margin, and ₹7,300 crore to ₹7,400 crore for FY28 with a 12% EBITDA margin.

Other growth levers: technical textiles and Madhya Pradesh cotton

Alongside Punjab, Sanathan is expanding technical textile yarn capacity in Silvassa. The company has said it is doubling capacity from 9,000 MTPA to 18,000 MTPA by Q1 FY27, and also referenced commissioning additional technical textile lines in Silvassa in Q1 FY27 that add 9,000 MTPA.

For cotton yarn, management has discussed a new greenfield facility in Madhya Pradesh through its wholly owned subsidiary, Sanathan Polycot. The project includes 50 acres acquired and an estimated capex of ₹420 crore to ₹445 crore, with commissioning targeted for Q1 FY28. The company has also cited a revenue potential of ₹450 crore to ₹500 crore from this project.

Stock context and funding updates

Sanathan’s stock was described as down 34% from its highs in 2025 in the NDTV Profit segment. Following the earnings release dated February 6, 2026, the stock closed at ₹443.20 on the NSE.

The company also outlined how it used IPO proceeds. It raised ₹400 crore through an IPO, used ₹300 crore to repay loans, and prepaid instalments due for the next two to three years, with repayment for the new project scheduled only from March 2028.

Key facts at a glance

What to watch next

The next operational milestone is the move from 450 MTPD to the 700 MTPD Phase I target by end-Q4 FY26, followed by a full-year contribution once the plant runs for the entire year of FY27. Investors will also track how pricing actions offset raw material inflation, given the company’s stated 20% to 25% rise in polyester prices and 8% to 10% increase in other costs.

Beyond Punjab, the timing of Silvassa technical textile additions in Q1 FY27 and progress on the Madhya Pradesh cotton project targeted for Q1 FY28 will shape the next phase of capacity-led growth.

Conclusion

Sanathan Textiles’ Punjab facility reaching 96% utilisation and turning EBITDA-positive in Q3 FY26 marks a shift from commissioning to scaled operations. The plant’s ramp-up, lead-time advantage for north Indian clusters, and the company’s stated timelines for Phase I capacity provide the near-term operating roadmap. The next confirmed checkpoints remain the end-Q4 FY26 target for 700 MTPD and the company’s Q4 FY26 guidance for revenue and EBITDA, with Phase II and additional capacity projects forming the medium-term pipeline.