Transcript of Q1 FY27 Earnings Conference Call

SUTLEJ TEXTILES AND INDUSTRIES LIMITED Lotus Corporate Park, ‘E’ Wing, 5th/6th Floor, 185/A, Graham Firth Compound, Near Jay Coach, Goregaon (East), Mumbai 400 063, INDIA. Phone : (022) 4219 8800/6122 8989 Fax (022) 42198830 E-mail : info@sutlejtextiles.com Website: www.sutlejtextiles.com CIN. : L17124RJ2005PLC020927 11th August, 2026 BSE Ltd. National Stock Exchange of India Ltd. Phiroze Jeejeebhoy Towers, E x c h ange Plaza, 5th Floor, Plot No. C/1, Dalal Street, Fort, G -Block, Bandra - Kurla Complex, Mumbai 400 001. Bandra (E), Mumbai 400 051. Scrip Code: 532782 Scrip Code: SUTLEJTEX Dear Sirs / Madam, Subject: Transcript of Q1 FY27 Earnings Conference Call Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, kindly find enclosed a transcript of the earnings conference call for the quarter ended 30th June, 2026 which was held on Thursday, 06th August, 2026. The same is also available on the website of the Company i.e. www.sutlejtextiles.com. The conference call held on 06th August, 2026, as per the Transcript enclosed incorporates mainly the highlights of financial results upto 30th June, 2026, and other related information which is already in public domain and / or made available / uploaded on the Company’s website. Please take the same on record. Yours faithfully For Sutlej Textiles and Industries Limited Manoj Contractor Company Secretary and Compliance Officer (Govt. Recognised Fo ur Star Export House) Regd. Office:Pachpahar Road, Bhawanimandi - 326502 (Rajasthan) • Mills:Bhawanimandi (Raj.), Kathua (J&K), Baddi (H.P.), Bhilad (Guj.) “Sutlej Textiles and Industries Limited Q1 FY27 Earnings Conference Call” August 06, 2026 MANAGEMENT: MR. ASHISH KUMAR SRIVASTAVA – WHOLE-TIME DIRECTOR AND CHIEF EXECUTIVE OFFICER – SUTLEJ TEXTILES AND INDUSTRIES LIMITED MR. SACHIN KARWA – CHIEF FINANCIAL OFFICER – SUTLEJ TEXTILES AND INDUSTRIES LIMITED Page 1 of 12 Sutlej Textiles and Industries Limited August 06, 2026 Moderator: Ladies and gentlemen, good day, and welcome to the Q1 FY27 Earnings Conference Call for Sutlej Textiles and Industries Limited. The management will be sharing the key operating and financial highlights for the quarter ended June 30, 2026, followed by a question-and-answer session. Please note that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. Documents relating to the company's financial performance are available on the Stock Exchanges and the company's website. Trust you have been able to go through the same. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sachin Karwa, Chief Financial Officer. Thank you, and over to you, sir. Sachin Karwa: Thank you. Good evening, everyone, and welcome to the earnings conference call of Sutlej Textiles and Industries Limited for the first quarter ended 30 June, 2026. I will briefly cover the operating environment and then take you through financial performance in detail. Our CEO will thereafter cover the business segments and the strategic business update. The operating environment in the first quarter was mixed. Global demand remained relatively stable compared with recent quarters, but the industry continued to contend with geopolitical uncertainty, raw material price volatility and evolving trade dynamism. Cotton prices moved upward during the quarter, while polyester and viscose stayed firm on global crude. The policy environment for Indian textile, however, continues to improve with free trade agreements and the diversification of global sourcing, creating durable opportunities for Indian manufacturers. Coming to the results. Stand-alone total income for the quarter stood at INR704 crores, higher by 17% year-on-year and marginally ahead of Q4, which was itself our strongest quarter of FY26. Gross margin came at 46.8%, an expansion of approximately 370 basis points over the same last quarter last year. Raw material consumption improved to 53.2% of the revenue from 56.9%, reflecting better product mix, our integrated fiber operations and disciplined procurement through a rising input cost environment. The improvement extends across the cost structure. Employee cost stood at 16.6% of the revenue against 17.7% a year ago. This quarter absorbed the annual wage revision, which takes effect in Q1. Power and fuel improved to 11% of revenue from 12.2%. EBITDA for the quarter stood at INR47.2 crores against INR5 crores in Q1 FY26 with EBITDA margins at 6.7% against 0.8% a year ago and 5.3% in the preceding quarter. This is the fifth consecutive quarter of margin Page 2 of 12 Sutlej Textiles and Industries Limited August 06, 2026 expansion. The progression reached 0.8%, 2.7%, 3.9%, 5.3% and now 6.7%. Finance cost stood at INR18.3 crores, higher than INR17 crores in the preceding quarter. This principally reflects working capital deployed to support revenue growth of 17% and increase in RM pricing. Our average cost of borrowing remains lower than a year ago, followed by 40 basis point improvement achieved through FY26. And our intent through the year is to bring absolute finance costs further down as operating cash generation strengthen. Depreciation stood at INR27.4 crores, marginally lower year-on-year. This brings us to profit before tax of INR4.2 crores against a loss of INR38.6 crores in Q1 FY26. I would highlight that this was a clean quarter. There were no exceptional item against INR22.5 crores of exceptional charge taken through FY26. The profit reported is entirely operational. After tax of INR1.5 crores, profit tax stood at INR2.7 crores against loss of INR25.7 crores in the corresponding quarter. On the consolidated results, we have also turned positive. On the balance sheet, our position remains disciplined. Working capital utilization remains comfortable against sanction limits. Inventory is calibrated to demand and receivable cycles are steady. Maintenance capital expenditure is proceeding as planned, and there is no change to our funding position. Capital growth for the year is secured from internal accruals and existing facilities with no additional equity requirement. To summarize the quarter financially, revenue up by 17%, gross margin up by 370 basis points, a ninefold increase in EBITDA, five consecutive quarters of margin expansion and a return to profit at both stand-alone and consolidated levels with no exceptional items. The numbers reflect the structural work of past 2 years. With that, I invite our Whole-Time Director and Chief Executive Officer, Mr. Ashish Kumar Srivastava for business and strategic update. Ashish Kumar Srivastava: Thank you, Sachin, and good evening, everyone. Sachin has already taken you through the numbers, so I will not repeat them. Let me instead tell you what we believe they mean, what is happening inside each of our businesses and where we go from here. When we spoke in February on quarter 3 call, we said Q4 will be better than Q3. It was. When we spoke on Q4 call, we said FY27 would be a year of continued sequential gains compounding quarter-by-quarter rather than a single dramatic year. Q1 FY27 is the first data point on that promise. And we want to talk you through it in detail because we think the quality of this quarter matters more than the headline. This is our first profitable quarter after a prolonged and difficult period, and it did not happen by accident or by market luck. It happened because the transformation we have been describing to you quarter after quarter is now showing up in the reported financials. The headline is that company has returned to profit, but we want to be careful [Showing first 8,000 characters — download PDF for full document]