- **lead** - A defining moment came with the purchase of machinery to create a fourth manufacturing unit and the later disposal of that machinery, which forced a structural contraction, while the company simultaneously became one of the first mills in India to produce yarn under the government-backed Kasturi Cotton Bharat brand. # Business segments Two engines that feed each other - a yarn manufacturing business built on premium certifications and global buyer relationships, and a captive renewable power fleet that lowers the cost of running it. ## 1. Yarn manufacturing: where the company earns its living **The business makes and sells certified cotton and blended yarn to international buying houses and domestic mills, competing on quality approvals rather than price.** - **A portfolio of premium certifications** - the company produces yarn under the Global Organic Textile Standard, Better Cotton Initiative, regenagri (regenerative agriculture), and the Kasturi Cotton Bharat brand, which comes with blockchain-based traceability and delivers higher softness, strength and colour vibrancy. These certifications act as a passport to buyers who demand proof of sustainable sourcing. - **Approved by global gatekeepers** - it is a preferred supplier to major international buying houses including Inditex, C&A, Marco Polo, Amfori@BSCI and MUJI, which means its yarn goes into supply chains that are audited for quality and compliance. No single customer accounts for more than 10% of revenue, so the business is not dependent on any one buyer. - **Raw material is the cost battleground** - cotton makes up 60-70% of manufacturing costs, and because the crop is seasonal, the company buys for the entire year in one go, tying up working capital for around five months of inventory. It partly offsets this by using longstanding supplier relationships to get three to four months of payment terms, and by sourcing diversified cotton varieties across India when prices are cheaper. - **A showroom for the product** - a dedicated product studio called “Sambandam Spinning Mills All Products Studio” was built at the mill premises in 2024 to showcase the yarn range to existing and prospective customers, turning the factory itself into a sales tool. ## 2. Renewable power: the cost advantage inside the factory **A 12.35 MW wind fleet and a 9 MW solar plant generate electricity that feeds the spinning mills, cutting the power bill that is one of the largest operating costs in yarn manufacturing.** - **Captive consumption is the primary purpose** - the wind energy converters in Tirunelveli District and the solar plants (a 4 MW rooftop installation across all three manufacturing sites and a 5 MW ground-mounted plant on 28 acres in Perambalur) together generated 305.42 lakh kWh of green energy for yarn manufacturing in FY25. That is power the company does not have to buy from the grid. - **Surplus sold to others** - when generation exceeds in-house needs, the company sells wind power to third parties and related parties at contractual rates, with revenue recognised based on units generated and regulatory credits granted. This turns a cost-saving asset into a modest ancillary revenue stream. - **Built in phases to match need** - the solar capacity was added in two stages, with the 5 MW ground-mounted plant commissioned after the rooftop system, and installation began in late FY22 specifically to reduce power costs. The wind assets are older, with generation fluctuating between 139 lakh and 305 lakh units across recent years depending on wind conditions. - **Grid power fills the gap** - the company still buys electricity from TANGEDCO, private producers and power exchanges when renewable generation falls short, so the captive fleet reduces rather than eliminates the external power dependence. # Group structure and partners **The company sits within a network of family-linked textile and healthcare entities that provide raw material, collateral backing for loans, and a minor associate income stream.** - **A textile sibling supplies raw material** - Sambandam Siva Textiles Pvt Ltd, a related party under common control, sells polyester staple fibre to the company, which it blends into its yarn products. - **Collateral comes from within the group** - Sambandam Fabrics Pvt Ltd has provided a corporate guarantee of Rs 2,435 lakhs and pledged its immovable property as security for the company’s bank loans, while Kandagiri Spinning Mills Ltd (a related party since May 2022) previously did the same for a term loan. - **A healthcare associate adds a side income** - the company holds a 49.75% stake in SPMM Health Care Services Pvt Ltd, which earned a profit of Rs 17.25 lakhs in FY25. It also sold its 26.88% stake in Salem IVF Centre Pvt Ltd to CK Birla Health Care Private Limited in mid-2024, exiting that investment. - **Management is embedded in industry governance** - Joint Managing Director S. Dinakaran serves on committees of TEXPROCIL and is a director of the Confederation of Indian Textile Industry, giving the company a voice in policy circles that shape cotton and textile trade.