RSWM LimitedQ1 FY27 Results & Financial Update

Work continues on the graphene-based fiber development project in tie-up with Birla Cellulose and internal polyester initiatives, with initial product rounds received and commercial rollout expected within the current financial year.

Domestic demand remained resilient and less volatile compared to international markets, where global brands followed a calibrated procurement approach amid evolving macroeconomic conditions.

Capacity utilizations remained healthy across segments during Q1 FY27: Mélange stood at 92%-93%, synthetic yarn at 96%, cotton yarn at 98%, denim fabric in the 90% range, and knit business in the mid-80% range.

Construction is underway for the B2B food-grade granules/PET project with 50,000 metric tons per annum capacity. Civil work and critical machine orders are placed, aiming for trials in Q4 FY27 and commercial production in Q1 FY28.

Knitting capacity is expanding from 650 tons to 900 tons per month (including 150 tons of new printing capacity funded by ₹92 crores of investments), with benefits and commercial trials expected to start from Q3 FY27.

The board granted principal approval for a new denim garmenting joint venture where RSWM will hold a major majority stake. The project targets an initial phase capacity of up to 500,000 pieces per month across phased implementations.

Power and fuel expenses declined from ₹123 crores in the previous quarter to ₹112 crores in Q1 FY27, with management targeting full-year power cost savings close to ₹100 crores through efficiency and renewable integration.

The food-grade PET project is expected to generate approximately ₹500 crores in revenue at full utilization, operating at industry-standard EBITDA margins of around 15%.

Finance costs stood at ₹31 crores for the quarter compared to ₹30 crores in the preceding quarter, primarily driven by higher working capital requirements.

Management expects upcoming quarters to perform similarly to or better than Q1 FY27, maintaining a positive business outlook supported by operational excellence and resource deployment.

Commercial production for the B2B food-grade PET project is slated for Q1 FY28, with capacity utilization planned at 75% in the first year, 85% in the second year, and reaching full potential of 90%-91% by the third year.

Graphene fiber development projects in collaboration with Birla Cellulose (viscose application) and in-house polyester initiatives are progressing positively, with commercial roll-out expected within the current financial year.

While knitted fabric demand was subdued during Q1 due to export-oriented customer exposure, the last two months have seen positive demand, a surge in inquiries, and a better outlook for current quarters.

An investment of ₹92 crores in knitting operations is underway, expected to scale capacity from 650 tons to 900 tons per month by Q3 FY27, including 150 tons of dedicated printing capacity to enrich product mix.

Civil construction is underway and critical machinery orders have been placed for the 50,000 metric ton per year food-grade PET granules project. Trial production is targeted for Q4 FY27, with commercial production expected in Q1 FY28.

The board granted principal approval for a joint venture in denim garmenting, where RSWM will be the majority stakeholder. The first phase targets up to 5 lakh pieces per month.

Increased usage of renewable sources (targeting around 60% consumption) and internal efficiency measures are expected to yield minimum power cost savings of ₹40 crores for the year on the same utilization, with overall full-year power savings targeted around ₹100 crores.

Finance costs for Q1 FY27 stood at ₹31 crores compared to ₹30 crores in Q4 FY26, primarily driven by increased working capital requirements.

Management expects all upcoming quarters of the financial year to be similar to or better than the positive Q1 FY27 performance.

The 50,000 MTPA B2B PET project is expected to generate approximately ₹500 crores in revenue at peak utilization, with standard industry EBITDA margins around 15%.

Management confirmed that graphene-based fiber development with Birla Cellulose and internal polyester efforts are progressing positively, targeting commercial introduction within FY27.

Polyester fiber prices surged up to 30% in March due to crude volatility, depressing customer stocking and lifting volumes in Q1, though pricing has since stabilized.

Renewable energy usage increased from mid-20s percentage to nearly 60% in Q1 FY27, delivering per-unit cost reductions exceeding ₹1 and targeted total yearly savings of around ₹100 crores.

Management clarified that graphene-based fiber development with Birla Cellulose for viscose and in-house polyester applications is progressing with positive initial product evaluations, targeting commercial rollout within FY27.

Management explained that a 30% spike in polyester fiber prices in March caused customer stocking hesitancy and margin pressure in the fabric segment during Q1, though pricing has since stabilized.

Management detailed that the ₹92 crore knitting expansion will lift capacity from 650 to 900 tons per month, incorporating 150 tons of new printing capacity to enrich product mix starting in Q3 FY27.