RSWM Ltd, a flagship textile company under the LNJ Bhilwara Group, has reported its consolidated financial results for the June 2025 quarter, revealing a mixed performance marked by modest profitability and a strategic operational shift. While the company posted a consolidated revenue of ₹11.7 billion and a net profit of ₹83.7 million, it also announced the closure of its spinning operations at the Chhata unit in Uttar Pradesh, citing cost rationalization and operational inefficiencies.
Key Highlights from Q1 FY26 (April–June 2025):
- Consolidated revenue from operations: ₹11.7 billion
- Consolidated net profit: ₹83.7 million
- Operating profit margin: 5.67 percent
- EPS: ₹0.32
- Closure of Chhata spinning unit announced
- Market cap: ₹742 crore
- Share price (as of August 5): ₹158
Financial Performance: Modest Recovery Amid Margin Pressure
RSWM’s revenue for the quarter stood at ₹11.7 billion, reflecting a 3.6 percent year-on-year growth. The company’s net profit of ₹83.7 million marks a return to profitability after several quarters of losses, driven by improved cost control and a slight uptick in export demand.
- Operating profit: ₹671 million
- Other income: ₹94 million
- Interest expense: ₹360 million
- Depreciation: ₹383 million
- Profit before tax: ₹64 million
Despite the recovery, margins remain under pressure due to high input costs and subdued domestic demand. The company’s EBITDA margin improved to 5.67 percent from 4.23 percent in the previous quarter.
Strategic Shift: Closure of Chhata Spinning Operations
In a significant operational move, RSWM Ltd has decided to shut down its spinning operations at the Chhata unit in Uttar Pradesh. The decision was made after a detailed internal review of cost structures, utilization rates, and long-term viability.
- Chhata unit specialized in cotton and blended yarns
- Closure to be completed by September 2025
- Impacted capacity: 28,000 spindles
- Workforce to be redeployed across other units or offered voluntary separation
The company stated that the closure is part of a broader strategy to consolidate operations and focus on high-margin segments such as mélange yarns, denim fabrics, and green polyester fibres.
Operational Overview and Segment Performance
RSWM continues to operate across multiple product lines including synthetic, blended, cotton, and specialty yarns, as well as denim and knitted fabrics. The company has seen traction in export markets, particularly in Europe and Southeast Asia.
- Export contribution: 38 percent of total revenue
- Denim segment revenue: ₹2.1 billion
- Green fibre production: 1,200 tonnes in Q1
- Utilization rate across units: 72 percent
The company is also investing in automation and digital traceability to improve efficiency and compliance with global sourcing standards.
Market Sentiment and Shareholder Snapshot
RSWM’s stock has remained volatile, reflecting investor caution amid operational restructuring and margin challenges.
- Promoter holding: 55.2 percent
- FII holding: 6.8 percent
- Mutual fund holding: 4.3 percent
- Retail holding: 33.7 percent
- 52-week high/low: ₹267 / ₹125
Analysts remain neutral on the stock, citing the need for sustained profitability and clarity on future capex plans.
Conclusion: A Quarter of Transition and Tactical Realignment
RSWM Ltd’s June quarter results reflect a company in transition—balancing modest financial recovery with tough operational decisions. The closure of the Chhata unit signals a sharper focus on profitability and strategic consolidation. As the textile industry navigates global headwinds and evolving demand patterns, RSWM’s next steps will be crucial in defining its competitive edge.
Source: Screener.in, MoneyWorks4Me
