Polyester manufacturer Sumeet Industries pushes ahead with capacity upgrades and renewable energy projects, despite margins affected by volatile input costs and geopolitical disruptions, as it aims for over 30% revenue growth in FY27.
Sumeet Industries said its quarterly performance was held back by a sharp swing in raw material prices, but the polyester maker is pressing ahead with a broader expansion plan centred on new capacity, lower power costs and a stronger balance sheet.
According to the company’s earnings call summary, revenue rose more than 9% year on year to ₹272.24 crore in the June quarter, even as EBITDA margin slipped to 3.24%. Management blamed the weaker profitability on volatile input costs, geopolitical disruption and a temporary 15-day maintenance shutdown that cut production volume by 17%. Gross margin also narrowed to 15%, reflecting the company’s difficulty in fully passing on higher costs.
The business is relying on a mix of capital spending and financing measures to restore margins. Business Standard reported in June that the board approved a ₹199.75 crore rights issue, while Dealroom said the offer launched at ₹11.86 a share and closed in July. The proceeds are earmarked for working capital, debt repayment, a captive 6.5 MW solar power plant and the integration of a 140,000 tonnes-a-year polyester chips facility acquired from Nakoda Limited.
Pratik Jaju, managing director, said on the call that roughly ₹100 crore from the rights issue will support working capital, ₹50 crore will go towards operationalising the Nakoda plant, ₹23 crore will be used to repay borrowings and ₹22 crore will fund solar projects. He said long-term debt would fall to around ₹60 crore after repayment, easing finance costs and giving the company more room to execute its expansion plans.
The company also said a new 30,000-tonne-a-year line was commissioned in two stages in July and August and is now running, with utilisation expected to improve over the coming month. Sumeet Industries said the new asset, together with the renewable energy plan, should support margins in the second half of the financial year. Jaju said the company expects about ₹25 crore in annual savings once the solar projects are fully commissioned.
Management is still guiding for more than 30% revenue growth in FY27, with EBITDA margin targeted at about 6% and profit after tax margin of 3.5% to 4%. That outlook rests on stabilising raw material costs, stronger demand for POY, FDY and texturised yarn, and the eventual commissioning of the Nakoda plant, which the company says should roughly double capacity and improve backward integration. Sahi.com has separately said the 30,000-tonne expansion could help add as much as ₹300 crore in annual revenue by FY27.
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