RSWM Limited ($500350)

Ladies and gentlemen, good day, and welcome to the RSWM Limited Q4 and FY '26 Earnings Conference Call hosted by RIK Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Richa Singh for management introduction. Thank you, and over to you, ma'am.

Thank you, Yousuf. Good evening, and welcome, everyone, to the RSWM Limited Q4 and FY '26 Earnings Conference Call. Today from the management, we have Mr. Rajeev Gupta, Joint Managing Director; Mr. Manoj Bansal, Chief Transformation and Chief Risk Officer; Mr. Nitin Tulyani, President and CFO; Mr. Surender Gupta, Chief Compliance Officer and Company Secretary. Before we proceed with this call today, I would like to take this opportunity to remind everyone about the disclaimer related to this conference call. Today's discussion may be forward-looking in nature based on current beliefs and expectations of management. It must be viewed in conjunction with the risks that business faces that could cause or differ from future results and performance, which is expressed or implied by such forward-looking statements. I now hand over the conference to Mr. Rajeev Gupta for industry outlook, followed by Mr. Nitin Tulyani to take over for the financial overview. Thank you, and over to you, sir.

Thank you, Richa. Good evening, everyone. I hope you and your families are doing well. It is my pleasure to welcome you to RSWM Q4 and FY '26 Earnings Conference Call, and we sincerely appreciate your continued interest and participation. The financial results of RSWM press release and investor presentations have been shared with the stock exchanges, and we trust you had an opportunity to review these. Let me start by briefly setting the content for global and Indian economy. As you all know, the past year, the year FY '26 has been a period of strategic transformation and disciplined execution for RSWM. While the global textile landscape remains complex due to continuous challenges on account of geopolitical factors, I'm pleased to share that we have navigated these headwinds with resilience and could turn around company performance, which is evident from the results shared yesterday for FY '25, '26. Our focus has been on improving the quality of earnings rather than chasing only volumes at a cost. And the approach is now beginning to reflect in our margins and overall profitability. Looking at the global environment, textile industry is currently going through a soft patch with demand normalizing rather than sharply recovering. Discretionary spending, especially in the Western countries continues to be cautious, which is impacting overall demand. At the same time, we remain mindful of the challenges facing the industry, including government regulations. For example, RoDTEP was taken off for part of the year. Duty, import duty on cotton was there for most part of this quarter. U.S. tariffs is a concern which all of us know. The recent impact of Gulf war is also very significant. We have headed to global uncertainties, these things and these things have also disrupted the trade flows. The impact has been visible in terms of volatility in the key raw material cost and also significantly increasing the other cost components like dyes and chemical costs, freight costs, impacting overall cost structure of the all textile products. Another key concern has been energy availability, especially gas. Gas availability due to restrictions of the route because of this Gulf war, along with the supply disruptions on the hubs like Surat has affected the part of industry value chain. RSWM is also impacted because of this disruption of gas, especially our Denim division has suffered production for some days during the month of March. Despite these near-term challenges, there are encouraging structural positive things, now progress on U.K., EU and New Zealand FTAs is expected to be open soon, and this will bring new opportunities for the entire textile sector. At the same time, we are increasing our focus on new geographies, adding new markets to our all products to diversify our revenues and reduce dependence on few markets. Internally, we continue to drive value addition by improved internal processes and review mechanism with a strong focus on execution, discipline and operational efficiencies. Our strategic direction remains clear with more focus on value-added products, enabling us to enhance margins over the higher up value chain. Our proactive shift towards renewable energy, which we shared in the last conference call, having a tie-up with Adani Round-The-Clock power. We are now having around 70% of our energy mix coming from sustainable sources like wind and solar, and this continues to be a key differentiator, helping us to mitigate the volatility and strengthen our long-term competitiveness. While these external challenges persist, our strategic focus remains unchanged, strengthening our product mix, driving the value-added growth, improving operational efficiencies and maintaining strict control on our cost. As we step into FY '27, we do so with a cautious but confident outlook. We are prepared for a gradual cooling in the global markets by maintaining downside readiness and also upside opportunities that we are likely to have. Our approach is capital allocation would remain disciplined with a strong focus on capital expenditure projects that offer shorter payback periods of one to three years, particularly in the area of modernization and productivity improvement, which help us in management of cost and also creating more competitiveness to us. Also, as you are aware, our Board of Directors in April approved a proposal for infusion of equity through the preferential issue of 24.7 lakh convertible warrants which are equivalent to almost INR 36 crores to LNJ Textile Advisory LLP, which is a promoter company of LNJ Bhilwara Group. This shows the confidence of promoters in the company's performance, again, a positive signal for all our investors. As I mentioned earlier, FY '26 has been a turnaround year for RSWM, where we could move from negative EBITDA from a negative PAT to a positive PAT. So, this significant improvement, we are sure we will be able to carry this forward, and this will further strengthen our financial position for FY '26, '27 through our financial prudence, strong operational controls and growth-oriented initiatives. I would like to thank all the members of RSWM family for dedicated effort during this full year FY '25-'26. Board of Directors for the timely advice, confidence of our valued shareholders and support of our Chairman, which enable us to turn around this company in this year. With visible margin improvements across quarterly and full year periods, we believe RSWM is well positioned to deliver profitable and sustainable growth in the coming quarters as well. With this, I would now like to hand over this call to our CFO, Mr. Nitin Tulyani, to take you through the financial performance for more details. Over to you, Nitin.

Thank you, sir. Good evening, everyone, and thank you for joining us on the Q4 and FY '26 earnings call. I'll take you through the key financial highlights and the operational metrics for the quarter and full year period ended March 2026. The business environment during the quarter reflected a gradual stabilization across the textile value chain following a period of demand volatility. While recovery in the global market remains major, we are seeing early signs of improvement driven by the normalization of the inventory level and relatively better visibility in the select segment. From an industry perspective, there is a clear shift towards the value-added and the differentiated product category. Coming to the financial performance for Q4 FY '26. Revenue from operations stood at INR 1,142 crores, registering a quarter-over-quarter growth of 4.5%, while declining 9.1% year-over-year, primarily due to weaker export demand. Our exports showed a recovery of 11.4% quarter-over-quarter at INR 368 crores, indicating early signs of improvement. Our domestic sales remained relatively stable at INR 774 crores, reflecting resilience in the domestic market despite overall demand softness. Power and fuel cost stood at INR 123.3 crores in Q4, reflecting a sequential decline of INR 4.6 crores from INR 127.9 crores in Q3 FY '26, driven by the improved utilization of the renewable sources of energy. On a year-on-year basis, costs were marginally lower by INR 1.5 crores compared to INR 124.7 crores in Q4 FY '25, indicating a stable input cost management despite the external volatility. EBITDA stood at INR 85 crores, up 4.3% quarter-over-quarter and 8.5% year-over-year with margin being stable at 7.4% quarter-over-quarter and improving by 115 basis points year-over-year, supported by operating leverage and cost efficiencies. Now coming to the full year '26 financial performance. Our revenue from operations stood at INR 455 crores, reflecting a year-on-year decline of 5.6%, primarily impacted by the weak demand conditions, particularly in the first half. Domestic revenue declined 4.5%, while exports were down 8% year-over-year. Despite of all these odds with respect to the declining revenue, we have been able to sustain our margins. Our gross profit improved to INR 1,753 crores, up by 1.4% year-over-year with the margin expanding to 38.1%, an increase of 246 basis points, primarily supported by better raw material cost management and improved spreads in the second half. The cost of raw material declined 9.5% year-over-year to INR 2,801 crores. Our employee cost marginally increased by 1.8% year-over-year, while power and fuel costs reduced by 3.4% year-over-year, reflecting effective cost control. For the full year, there has been a reduction of INR 17.6 crores in the overall power and fuel expenses. The consistent reduction underscores the company's focused initiative on energy optimization, operational efficiency and cost realization contributing positively to the overall margin performance. Our other income increased significantly to INR 51 crores in FY '26 from INR 29 crores in FY '25, registering a strong growth of INR 22 crores, a year-over growth of 74.5%, primarily driven from the gain from the sale of the non-value assets. The full year finance cost for FY '26 was INR 123 crores, down from INR 135 crores in FY '25, a steep decrease of INR 12.5 crores or we can say 9.2% compared to the last year. Following the enactment of the Income Tax Act 2025, which got implemented from 1st April 2026, which provides us option to move to a conceptual corporate tax overall at a rate of 25.17%, including surcharge and carryforward of MAT credit, we have reassessed our deferred tax liability at 25.17% as of March 31 compared to 35% earlier. The company has decided to off for this new tax regime from FY '27 resulting in the overall reduction in the deferred tax liability by INR 22.66 crores. Other expenses declined 8.3% year-over-year to INR 441 crores, highlighting the continued focus on operational efficiency. EBITDA stood at INR 327 crores from INR 323 crores, registering a strong growth of 40.5% year-year with margin improving to 7.1% from 4.8%, an expansion of 231 basis points. Our PAT stood at INR 52 crores compared to the loss of INR 31 crores last year with margin improving to 1.1% from being negative 0.9%, which clearly reflects a strong turnaround in profitability. From the balance sheet perspective, our net worth increased to INR 1,372 crores in FY '26 from INR 1,308 crores in FY '25. Total borrowing reduced to INR 1,510 crores from INR 1,621 crores last year, reflecting continued deleveraging and a stable capital structure. The capital deployed remained steady at INR 3,468 crores. On the asset side, we saw improved working capital efficiency with inventory reducing to INR 620 crores from INR 730 crores and trade receivable declining to INR 631 crores from INR 696 crores. Our financial assets has increased to INR 387 crores from INR 299 crores, primarily on account of investment the company has done in Adani Power and strengthening overall liquidity, indicating ongoing investments in the growth initiatives. Overall, these movements reflect disciplined capital allocation, improved working capital management and a stronger balance sheet position. Now with a stronger balance sheet, improved cash flows, and continued investment in modernization of our plants, we believe the company is well positioned to deliver steady revenue growth and margin expansion in FY '27. Thank you. We will now be happy to take your questions.

[Operator Instructions] The first question comes from the line of Saket Kapoor from Kapoor & Co.

You mentioned that we have laid the foundation for improving our return ratios going ahead, so, in context to that, if you could just give us some color of what will bring that rate of change in terms of improved profitability, in terms of how the utilization levels are currently, and what are we anticipating going ahead?

So if I could gather you right, you are talking about the utilization of plant operations.

Yes. Plant operations and what exactly are we expecting when we are alluding to the fact that our profitability will be improving on our profitability going ahead?

Okay. So, the year under discussion, particularly the quarter 4 has been really, really challenging for entire textile industry. Needless to mention, this U.S. tariff was already creating a lot of issues and then this disturbance in Gulf between Iran and Israel put many things for a challenge, particularly availability of gas and then transportation period for export, freight cost for export to these countries, dyes and chemical costs. So, all these things have actually impacted majorly in the quarter under discussion. Now when we say that we are hopeful or we expect things to be better off in the coming quarter, one is that we expect the things to be normalizing and normalcy to prevail in this period. But at the same time, we also are looking at for better utilization of assets, particularly denim and knit. These are the two business which were impacted largely because of this geopolitical situation. Our other businesses, synthetic yarn and sustainable textile business, which is recycled polyster, are more domestic businesses and the challenges are comparatively less. Denim and knit are the most affected and the Melange, particularly was impacted because most of the sales are deemed export, we supply to the garmenters who are exporting internal. That was also disturbed. So we expect utilization in these three businesses to be slightly better and the cost also to be controlled in current quarter and the quarters now onwards. So, this probably will help us in getting the better margins. Otherwise, focus on internal efficiencies, internal operational controls will continue to be the same, and we are likely to get benefit of whatever steps we took in the last four quarters for the same.

Sir, in terms of utilization of the assets, if you could give category-wise how has been the utilization in percentage terms.

So if you look at in synthetic and fiber business, we are more or less utilizing this optimally. In the Menage the utilization to the tune of 65% to 70%, which we expect to go back to 85% to 90% level maybe within this quarter or early next quarter. Denim utilization has been comparatively better. We currently are able to utilize 80% plus, and we can improve it further to 85% to 90% to optimize our operations. Net operations were affected more. We were having the utilization below 80%, which can go to plus 85% level. So, I think in all three businesses, there is a potential to improve utilization between 7% to 10% in the coming quarters against the utilization level in Q4.

Okay. And the disturbances which we faced, particularly with the availability of gas that things have been corrected and post March exit are things back to normal or the cost and all have gone up, of the cost of gas, procurement of gas?

So, you are updated on these issues probably. The availability is better. We had the disturbance in mid of March for two, three days and on and off of disturbance due to non-availability throughout March. But now in April, availability of gas is there, but the cost has significantly gone for upward revision. So that is a challenge, and we expect this to resolve maybe towards the end of, that is only a hope. Till the time things normalize in Gulf. So, this cost may still continue to be an issue with us. But availability for sure is okay now.

Sir, can you give some more color on the spread part then how, although there has been a cost increase, so that should have been passed on to your customers? And how have the, currently the spreads in our yarn business?

Spread in business to business are different and they are maintained in both businesses is improving. But the business under discussion is damning where this gas increased prices has impacted. And as you know, you have already booked orders in hand, passing on the cost or trying to increase the prices happen for the future order. So, there is a lag between cost increase and the price increase. To that extent, you always suffer and sometimes it is not possible to increase all cost to the final product. Now particularly, if I talk about denim, there has been 4 or 5 fronts where cost has increased. One is gas, second is dyes and chemical, third is freight and fourth and biggest is yarn prices. So though as a company, we have advantage if the yarn prices go increase for our yarn business. But for the denim business, the increase in the yarn prices, both in cotton or polyester cotton have impacted increase in the price of denim per meter, but passing on it to the customer always take time and there is a lag. So, to that extent, our margins and the spreads are impacted in denim. To some extent, this also impacted our knitting business. But for other business, normally the raw material stage and the sales are more or less on the similar days and the spread is kind of maintained. But passing on the increase in cost to the customer normally takes some time.

Sir, I would request you to rejoin the queue. [Operator Instructions] The next question is from the line of Reuben from Equity Intelligence.

Congrats Mr. Riju Jhunjhunwala and Mr. Rajeev and the entire RSWM team for delivering a very good set of numbers, even though it was a very challenging period. So, I just wanted to say kudos to you all. So, my first question, I just want to know, see, in the spinning division, right, what percentage is currently structurally not viable at the current yarn and cotton spread? And what are the plans for those divisions? Are you looking at shutting it down? Or are you looking to continue to operate it, but maybe at lower level? Can you help me understand that?

So, I appreciate you continue discussions from the last investor call we had. So last time we discussed that we'll cut down certain operational spindles or the products where we are not able to have the right margins. So, we did that as we discussed in the last conference call also, operations of Chhata Spinning were curtailed, which was having inefficient production, and we were not able to clock the required margins there. A few other products within the businesses were changed for the better products where the margins were there. A lot of work has been done on product mix and elevating the product from low contributing to better contributing products. So, at the same time, we are not envisaging any close of spindlage or loom or other operations in this quarter and next quarter for amount of those challenges. Probably that journey is largely done, and we will keep on evaluating as and when it is required.

Okay. So, the spread, I mean your margins, EBITDA margins are around 7.6%. So, it has been steadily increasing. But where do you see the spread going to be? Do you, in order for Al to hit like a double-digit EBITDA, is it dependent on maybe demand? Or is it going to be an internal change? Or is it customer mix? What would, what changes would be required to get that double-digit EBITDA margin?

So first of all, as you want it to reach double digit, more than that, I want it to see in double digit at the earliest. So that is, we are aligned fully there. Now how this will happen, it cannot be because of one particular thing. It has to be a combination of many things. All internal operations have to be at the right level of performance. We have to closely participate with the customer in terms of product development, creating value for them and partner with them in their product development, and also, we have to be efficient in our supply chain in terms of sourcing our raw materials and ensuring that we sweat our assets right, utilize them right and work on the inefficiencies continuously. So, the directions which we have started in FY '26, we like to continue in the coming quarters as well. And as the market start looking slightly better, we more than you are looking forward to see double-digit EBITDA at the earliest.

Okay. And one last question before I get back into the queue. So, I'm also following your turnaround series. I think that was very nice. I follow it every week that you put out. So, it's really good. So, the thing is when you compare your working capital to your peers, it still seems to be slightly higher. And you were talking about cash flows last time. So, is there a targeted working capital to sales ratio you're looking at? Is that something you have in mind?

So I agree with you. But when you compare with the yarn people, maybe our working capital ratios are slightly higher. But please be aware that we are a combination of five businesses. Our working capital in cotton yarn, melange yarn, then synthetic yarn is more or less in line with the peers in the same industry. Denim has a different set of working capital, where outstanding has a different this thing. But we are continuously working in this area. And Nitin, you want to add something in this. Let me hand over to him.

So just adding to what Rajeev said, if you come to the working capital, which is visible in the balance sheet, it consists of two portions. One is in the form of the structured term loan, which we have taken in the recent past for the expansion of our denim business, knit business as well as the Kapaas unit, which exists in Banswara. So as of balance sheet date, we have roughly INR 700 crores of term loan, which forms a part of the total borrowings. But if you talk about the working capital, it's close to around INR 800 crores, which is structured across all the different businesses which we have, so I hope this answers to your curiosity of the working capital.

The loans which are there, we are repaying them year-over-year. And hopefully, in next three years, our entire loans will be finished, the major portion of it.

[Operator Instructions] Next question is from the line of Rishabh Sharma from VT Capital.

Sir, could you quantify the PAT impact of the deferred tax reversal in Q4 and help us understand the normalized run rate going forward?

So you want to understand the PAT. So overall, there is an impact of INR 23 crores for the deferred tax liability, which we reversed. If we have opted for the existing income tax rate, we would have closed the PAT at INR 28 crores. And this is clearly given in the notes to accounts also if you have gone through the same.

And the revenue decline has been sharper than the industry expectation over the last few quarters. So are we losing market share in any category or is the weakness entirely demand driven?

Okay. So that you observed that. I was expecting this question. So this revenue decrease in two fronts. One is that we closed Chhata operations. So, for the year, we had approximately INR 250 crores of revenue from Chhata spinning, so which has impacted this revenue degrowth. And second has been tough marketing environment, particularly because of U.S. tariff, which we witnessed in Q3 that impacted out major exports. So, I think these are the two major causes that have impacted the revenue and as I mentioned earlier, we focus more on the profitability than pure revenue. So, where it made sense for us, we work on the operation in a way that we may have less volume, but it should be profitable revenue.

Sir, under RSWM 2.0, we are seeing that turnaround in the company's profitability. Can you share the current year KPIs or target under which business initiative particularly around margins and ROCE.

So, I'm happy that you want to know the current year targets and everything. I can share with you that we will continue to work in the similar fashion. And the outlook at this point of time is that current quarter is going to be slightly better equal to last quarter. And our KPI remains EBITDA revenue and positive cash flow. So, working capital control, EBITDA enhancement and revenue maintenance are the major key CapEx that we, major KPIs that entire organization is working on. Then you have each department have operational KPIs. But broadly as an organization, we are focused for sustainable growth.

So sir, in the EBITDA which factor would be the most positive step which will be giving the outcome positive.

So, there has been, you improve where you lack. So, we have been having a lot of challenge in our knitting business in the year '26. And with the new FTAs with U.K. and EU happening, and this U.S. tariff now being settled, this business of knit is likely to improve and EBITDA enhancement will happen from there. Secondly, as we discussed in last and the call prior to that, that we are having INR 92 crores of expansion in our knitting business. printing as one of the segment. So as a result of this new CapEx, we may also add EBITDA in third and fourth quarter in our knitting business accordingly.

Sir, any CapEx plan in the future?

So currently, we are not having any major CapEx. There are two things which are happening. One is this knitting expansion, which is under execution, and we are implementing that. Then we have certain modernization CapEx for all the plants where we want assets which are old that be replaced. And these are the two major things we are doing in RSWM.

[Operator Instructions] Next question is from the line of Rohit Ohri from Progressive Shares.

Many congrats on this genuine operational turnaround that the company is showing. I hope it is not some cyclical optical recovery. But I think that all the efforts that you are putting in since last two years or so, they tend to be showing fruits right now. I have some questions. Very quickly, I'll go through them. The first one being that we see this good growth. But in terms of the recovery that is coming through, how much percent would you attribute to maybe product mix or maybe the discounting which you might be giving lower to the clients or customers in addition to that, the energy optimization or inventory discipline? Or is it because of the exit of some low-margin businesses that, how much percent could you give to each of these entities?

Okay. So, Rohit, first of all, thank you very much. And I will ensure you that this is not a cyclical thing. The year under consideration has been really very tough for us as well as for the entire textile industry. Whatever could have been uncertainties prevailing in the world have prevailed in this year as a whole. So, the year was tough and the which we are seeing is more because of internal operations than market-led. Now coming to what led to this turnaround or what are the basis of this recovery. So largely, as you mentioned, this is optimization of product mix. Now we have five businesses and each business we try to optimize product mix, essentially reducing our volumes of the low contributing products and enhancing or developing new products which give you comparatively better volumes. And then optimally utilizing your value-added product lines where attachments or competencies are built, how to utilize them for and then try to focus on your working capital. If you look at we saved around INR 12.5 crores of interest. So that more has been in terms of optimizing our working capital, both in debtors as well as in stocks. So, the team has been trying to work on lower availability of stock and try to work more closely with the customers for the better collection. So, everything has contributed in this recovery, and there is still a margin which we have to continuously keep on improving.

Rajeev Ji, how much percentage would be the value-added products or value-added volumes, if you can, if you have that number handy with you?

So it will vary from business to business, but still we have a very less products which are really value added. Now what happened is whatever the value-added products we develop in the last two, three years, they turn into commodity very soon. Value-added is only till the time you are not there with most of the spinners or most of the other products. You have to continuously keep on working. So as of today, we are not mapping this exactly the way you are saying, but I would accept that it is not high in numbers. It is less than maybe one-fifth of our sales.

Okay. My next question is, you did mention a bit about the customer addition or geographic additions in your opening remarks. But if you can take us through that how many of these customer addition or deletions have happened maybe in the domestic or the international market? And which are the global customers which have actually started procuring from us when we talk about U.K. FTA or maybe New Zealand FTA or the other FTAs that are coming through from Australia?

So these FTAs are yet to be a reality. These are more in the terms of expectancy and we will have a real implementation of this early next year or maybe towards the end of this year. Now what we did was optimizing within our own markets and seeing that which market is comparatively better for products, so we've added a couple of countries. For example, in Milan, we were exporting more to, say, Korea and Bangladesh. So we added two more markets of Europe and a few customers from Sri Lanka and the focus on developing the niche markets where the competition is more in the quality of the product rather than suppliers. So similarly in denim, we try to work on a few domestic as well as international brands. U.S., we added 2 more customers during this year. And within India, our volume to brand have increased over a period of time. Nomination business and this specialized cotton or fibers is another thing which we focus. So I think it is a combination of many things, not exactly only addition of markets, the paying markets or the rewarding markets, all the rewarding customers have been something which we try to get.

Okay. That's encouraging. So you mentioned about this investment made in the knitting business, which is around INR 92 crores. So can you take us through that what sort of asset turns or maybe the EBITDA margins that you expect from this business going forward maybe in the next 1.5, 2 years or so?

Okay. So Manoj Bansal ji is with me. He is leading this project. I'll request Manoj to update.

Currently, we have around 600 tonnes of net capacity, which we take to 900 tonnes. So, one of the additions we are doing is printing. So out of 900, 120 tonnes would be knitting. So, this actually adds a new product segment. With this 900 tonnes of expansion, probably our product mix will be better than what we are supplying today. That is number one. Currently, EBITDA, we are, actually we intend to kind of implement the entire in the third quarter of this year. So once this is in place, we are definitely expecting the EBITDA by 3% to 4% in the current levels. So that is what our outlook is. And obviously, with this improved product mix, as Rajeev mentioned, we are targeting a number of new markets, both India and outside. So this will actually strengthen the entire business.

Okay. Sir, anything would you like to share on the GreenPET project? Anything on the CapEx guidance or maybe that, what is the threshold that you're targeting for this RPD?

Yes. See, this B2B project is, the total CapEx is INR 427, which we already shared with the public domain. So, this project, we already started working. This project is coming in Ratlam, in a place called Reeti. So we intend to start the construction in the middle of May per se. Land is already acquired. Everything is there. We've already got the consent to establish certificate from the government. So intended to start towards the middle of May, and we want to make it operational next year, the first quarter of the financial year. That is the overall plan. And we are very exciting about this project and machines et cetera have been finalized for this project. So that is about the B2B project. In case you have any specific question on B2B, I can give answer on that. But as of now, this is the plan on ground.

Okay. Rajeev Ji, the last question, if you can take us through that, how do you see India positioning against Bangladesh, Vietnam or China? And what are the things that you look at maybe in the next three years or five years or so? Do you think that we can probably grow at maybe 15% CAGR growth for the next maybe four years or so?

So, Government of India has worked out a very clear growth plan and Ministry of Textile along with all other ministries, including Ministry of Commerce and Finance Ministry is supporting. We are getting the required tools. And with the FTAs of U.K. and EU coming in, we will have an excellent opportunity as a country for textile industry to make an impact. Now India has abundance of cotton. The government is also encouraging man-made fibers to create. Now if you talk about Bangladesh and Vietnam, Bangladesh has a huge garmenting capacity. And India still is predominantly a spinner, which is catching up in downstreams like, knitting, weaving, and processing. But in garmenting, we still have a major gap. So next three years, if you look at India as a country has to focus more on creating more garmenting facilities and then try to see that we build on and we come up to the story of Indian government's target of going to 100 billion exports from 39 billion of grant and 250 billion in domestic content of 147 billion. So I think with all the things falling in place, whatever we missed in the last three, four quarters, next two or three years are going to be a good period for the Indian textile industry if geopolitical situation settle down.

And sir, in terms of RSWM maybe reaching to INR 6,200 crores or INR 6,500 crores kind of a top line in the next three, four years, do you think it is possible?

Yes, yes, it is possible. The way India is growing, RSWM will not miss out this opportunity. Only thing is let's keep our fingers crossed, and we need well-wishers like you.

[Operator Instructions] Next question is from the line of Nihar from Millennium Money Finance.

Congratulations on wonderful recovery of the company. So sir, I have 2 questions. As you stated that U.S. tariffs impacted the company. So would you say that the U.S. order book has fully recovered after the tariff settlement?

So I will say that it is under recovery. Normally, the garmenting is a long cycle. Once you miss a cycle, sampling and the product orders are done to maybe the alternate countries, it takes time to come back to the supplier. So, where we stuck to those customers offer discounts. So those volumes are coming back. But the product development which suffered during this period of three to six months, that is still impacting. And if everything goes well, I think another two quarters, things should be back to normalcy.

Okay. And the second question is that what percentage of our total exports are from U.S. currently? And how much you think it will grow in the future?

So if you talk about India, India has a good share of exports to U.S., particularly in the market, the products like home textile. Now if you talk about RSWM, our direct sales to U.S. are limited. Most of the products that we supply are going to the garmenters or if I talk about yarn to the weavers and knitters where they in turn convert into garments and then they get exported. So our exposure to U.S. market is not direct. It is indirect and we are impacted indirectly and also recovering indirectly.

Next question is from the line of Pramod from Interglobe Finance.

I wanted to understand the power cost. In the stand-alone, I can see INR 495 crores, while in consolidated, it is INR 484 crores. The first question is why the consolidated number is lower than the stand-alone number in terms of power and fuel. And second is the investment of INR 60 crores in the renewable energy. What is the power cost reduction that we are looking at?

So coming to your first question with respect to the power cost, like in our consolidated financials, we have another entity called BG Wind Private Limited. So which is primarily for the wind energy. So maybe because of that, the number is, you are finding the difference. Coming to the power cost impact which you are talking about, so I would like Manoj to answer this.

Regarding the Adani Power, we are anticipating an impact of almost INR 1 per unit in the overall production.

And how many units would that be? Can you help me translate that in terms of amount, sir, for the next year?

Round we use currently around 40 lakh, 50 lakh units per day.

So that would be one. 40 lakh, 50 lakh units per day.

So this impact is varying from season to season. This is solar and wind power and the availability of wind and power generation of solar is something which varies from season to season. So on an average, we are likely to get saving on, say, between 3 lakh to 5 lakh units per day.

So, 40 to 50 lakh units per day, right?

No, no. What we are saying is because of this project, the impact would be almost 300 to 400 lakh units per day and the impact is INR 1 per unit. So you can anticipate probably you can see the 3 lakhs around 3 lakh to 4 lakh impact per day. So monthly, if you see almost a growth.

Next follow-up question is from the line of Reuben from Equity Intelligence.

So it is good to see like you're doing this capital raise even though you're just increasing your stake by 2.5%. I just wanted to understand that a little bit better because earlier in the news, it was saying that Bhilwara was looking at investing INR 700 crores for the GreenPET plant. But now it seems to be largely done through RSWM, and we are raising debt for it. So is there a possibility that maybe the promoter would be infusing more equity in this project? Could you just help me understand that?

We could not get your question. Can you rephrase that in a way that we can...

So before it was like Bhilwara was looking at investing INR 700 crores. That's what I read in the news.

I got it. You are talking about B2B project. As a group, it was being explored by our Bhilwara Energy Company. But originally, this project was envisaged by RSWM and we were exploring this project at location other than the current location as a plant. Then RSWM financials at that point of time and overall within RSWM was taking time, that is why this settlement was there. But now since we already are in fiber manufacturing and we produce 130 metric tons of crystal fiber from recycled pet bottles every day and we consume 60 lakh bottles per day, so management per se thought that it makes more synergy to have this project in RSWM, and in order to ensure that we do not open a big capacity right in the beginning. The project envisaged originally was around INR 700 crores. And then we scaled it down almost to 60%, 65%. And the current project which is our subsidiary in RSWM is around INR 427 crores.

So, I'm just, what I'm trying to understand, it is bit to worry that it's going to be majority through debt, like INR 300 crores in the last call that was what was mentioned.

It is 70-50.

Wouldn't it be better to raise funds and not lose debt instead?

So Nitin this side, just to answer your query. So, the total project cost is INR 427 crores, out of which we have raised almost 70% of the amount by way of project financing. We have already got a loan approved for INR 300 crores. And rest of the portion is being introduced by a mix of equity and a loan from holding company. This is how the structure is for the entity.

I take that as the last question for the day. Ladies and gentlemen, that was the last question for the day. I now hand the conference over to the management for the closing comments. Thank you.

So, in closing, I extend my sincere gratitude to our employees, stakeholders and partners for their unwavering support. With collective effort and a shared vision, we are well positioned to drive innovation, strengthen our market presence and deliver sustainable value. The road ahead holds great promise, and I'm confident in our ability to grow and succeed in the years to come. Thanks.

Thank you, sir. On behalf of RSWM Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.