1. Executive Overview
Shree Ram Twistex Limited is a B2B textile company engaged in manufacturing 100% cotton yarn. Since starting operations in 2016, the company produces compact ring-spun and carded yarn used in segments like denim, shirting, towels, and home textiles. Its focus is on delivering consistent quality to meet the needs of textile manufacturers.
The company operates a fully integrated manufacturing facility in Gondal, Gujarat, with a capacity of 9,855 MT per year and high utilization levels (~87% in H1 FY26). Its strategic location near cotton-producing regions helps in efficient raw material sourcing. Strong relationships with large buyers and a dual distribution approach support steady demand and market reach, especially in key textile markets like Gujarat and Maharashtra.
2. Business Model and Revenue Streams
- B2B Revenue Model: Earns revenue by selling cotton yarn to textile manufacturers, bulk buyers, and fabric processors.
- Domestic Focus: Around 90% of revenue comes from India, mainly Gujarat (~88%), while exports (~10%) are done through merchant exporters when needed.
- Sales & Pricing: Orders are executed via purchase orders, mostly through brokers/agents (8 in number) at a low cost (~0.58% commission).
- Client Concentration: High dependency on key clients, with top 10 contributing ~80% of sales; Welspun Living alone contributes ~29%.
- Supplier Dependency: Raw material (cotton) forms ~73% of cost, with top 10 suppliers contributing ~94% of purchases.
- Working Capital Management: Uses short-term pledge loans (₹2,000 lakhs from Axis Bank) against cotton inventory to manage seasonal cash flow needs.
3. Products and Service Portfolio
The company operates a highly adaptable manufacturing setup capable of producing standard and value-added 100% cotton yarns in counts ranging from Ne 8 to Ne 40.
- 100% Cotton Compact Ring-Spun Combed & Carded Yarns: The foundation of the portfolio, used in premium apparel, denim, and home textiles.
- Compact Eli Twist Yarns: A double-twisted, high-strength value-added yarn used in luxury shirting and premium knitwear.
- Compact Slub Yarns: Specialty yarns with intentional thickness irregularities, targeted at fashion apparel and vintage-look garments.
- Lycra Blended Yarns: An elastic, stretch-recovery yarn ideal for activewear and stretch denim.
- By-products: The company generates supplementary revenue from Cotton Waste, sold to non-woven fabric and open-end yarn manufacturers.
Revenue Drivers vs. Emerging Segments: Carded Yarn and ELI Twist Yarn form the historical core of the business, collectively driving over 54% of total revenue in H1 FY26. However, Organic Yarn has rapidly emerged as a massive growth driver, surging from just 0.87% of revenue in FY25 to 21.52% in H1 FY26
Key Operational Data: Capacity and Utilization
| Operational Parameters | H1 FY26 | FY25 | FY24 | FY23 |
|---|---|---|---|---|
| Total Installed Capacity (MT/Annum) | 4,927.50 (half-year) | 9,855 | 9,855 | 9,855 |
| Utilized Capacity (MT/Annum) | 4,286.92 | 8,475.30 | 8,573.85 | 6,898.50 |
| Capacity Utilization (%) | 87% | 86% | 87% | 70% |
4. Key Business Strengths
- Fully integrated spinning infrastructure: Centralized operations from cotton bale procurement to finished packaging ensure total process control and output consistency.
- Technological edge in Compact Ring Spinning: deployment of advanced European machinery reduces fiber hairiness and breakage, yielding higher premium yarn output.
- Sticky institutional clientele: Proven ability to customize yarn parameters (count, ply, twist) has secured repeat business, with 6 key clients retained for over four years.
- Strategic geographic positioning: Location in Rajkot, Gujarat provides a localized advantage for ginning mill proximity, minimizing inbound supply chain disruptions.
- Ample headroom for brownfield expansion: The current built-up area utilizes only 33.95% of the owned freehold land, allowing aggressive capacity scaling without new land acquisition costs.
5. Future Growth Strategy
- Aggressive shift to captive renewable energy: Scaling green infrastructure via a 6.1 MW ground-mounted solar plant and a proposed 4.2 MW wind project to permanently crush grid electricity dependencies and expand margins.
- Vertical integration via in-house TFO twisting: Commissioning 5 Two-For-One (TFO) twisting machines by July 2025 to insource the production of high-margin Eli Twist and Lycra-blended yarns.
- Working capital cycle optimization: Enforcing stricter credit terms, optimizing demand forecasting, and utilizing pledge loans to structurally improve cash conversion.
- Targeted debt rationalization: Utilizing IPO proceeds to retire high-cost SIDBI financing linked to solar projects, instantly improving the debt-to-equity profile.
- Deepening broker networks: Expanding the roster of third-party agents to drive volume growth in underpenetrated domestic states without inflating internal SG&A expenses.
