Spenta International Limited is a specialized Indian textile manufacturer dedicated to the design, production, and export of premium cotton socks. Operating within the **Knitted Socks** segment, the company has established a vertically integrated model that combines manufacturing excellence with strategic trading. Spenta is currently pivoting toward the branded garment sector, leveraging technical innovation and global "China Plus One" sourcing shifts to capture high-end international and domestic market share. --- ### **Core Manufacturing Capabilities & Infrastructure** The company’s operations are centralized at its manufacturing facility in **Palghar, Maharashtra**. Spenta focuses on high-quality output for men, women, and children, utilizing a mix of owned machinery and strategic trading to meet demand. | Manufacturing Metric | FY 2023-24 | FY 2022-23 | FY 2021-22 | | :--- | :--- | :--- | :--- | | **Total Machines Owned** | **267** | **270** | **267** | | **Machines in Active Production** | **178** | **227** | **224** | | **Installed Capacity (Pairs)** | *Not Disclosed* | **1,13,59,500** | **1,10,25,000** | | **Actual Production (Pairs)** | *Not Disclosed* | **1,12,37,264** | **1,07,36,284** | | **Socks Purchased (Trading)** | *Not Disclosed* | **21,34,810** | **28,25,890** | **Operational Enhancements:** * **Technology Absorption:** The company has integrated **Metal Detectors** into finishing lines for quality assurance and performs **in-house repairs** of electronic knitting machine parts to reduce dependency on expensive imported spares. * **Resource Efficiency:** Spenta maintains a high power factor of **0.998 to 0.999**, securing consistent electricity rebates. Recent upgrades include energy-efficient air compressors, dryers, and motors. * **Sustainability Initiatives:** The facility operates an **ETP plant** for wastewater treatment. Management is currently in negotiations to install **solar panels** to transition away from grid-heavy consumption. --- ### **Strategic Growth & Market Positioning** Spenta is positioning itself to benefit from the Indian government’s target to increase manufacturing’s GDP contribution from **17% to 25% by 2025**. * **Global Supply Chain Shifts:** The company is actively capturing demand from **USA and Europe** as brands seek alternatives to Chinese manufacturing. * **Product Innovation:** Development is focused on **innovative yarns** and **eco-friendly chemicals**, specifically targeting the high-margin **sports** and **premium fashion** segments. * **Digital Transformation:** To mitigate the risks of fluctuating offline demand, Spenta is planning a venture into **e-commerce selling**, allowing for direct-to-consumer reach and improved brand visibility. * **Accreditations:** The company utilizes global quality certifications to maintain partnerships with major international brands, focusing on the "fashion quotient" of its knitted offerings. --- ### **Financial Performance & Shareholder Returns** While the company saw a revenue contraction in the most recent fiscal year, it has maintained profitability and initiated shareholder rewards. | Financial Highlights (₹ in Lakhs) | FY 2023-24 | FY 2022-23 | FY 2021-22 | | :--- | :--- | :--- | :--- | | **Total Revenue** | **3,514.68** | **5,359.33** | **5,216.95** | | **Profit Before Tax (PBT)** | **145.98** | **127.92** | **265.48** | | **Profit After Tax (PAT)** | **110.12** | **114.60** | **218.99** | | **Dividend Recommended** | **₹ 1.00 / share** | *Not Disclosed* | *Not Disclosed* | *Note: The dividend of **₹ 1.00 per equity share** was recommended for the fiscal year ended **March 31, 2025**.* --- ### **Capital Structure & Debt Management** Spenta has demonstrated a commitment to debt reduction, transitioning its banking relationship to **Kotak Mahindra Bank**. Borrowings are secured by the company's fixed assets and the **personal guarantee of Promoter Director, Mr. Danny Hansotia**. **Debt Maturity Profile:** * **Term Loan (Kotak Bank):** **₹ 3.57 Crore** (as of Mar-24), repayable in 116 EMIs ending **November 2031**. * **WCTL (ECLGS Scheme):** **₹ 0.48 Crore** (as of Mar-24), with the final payment completed in **June 2024**. * **Liquidity Management:** Working capital is supported by overdraft facilities secured by a **100% lien on Fixed Deposits** with DCB Bank and ICICI Bank. --- ### **Risk Factors & Mitigation Strategies** The company operates in a **working capital intensive** and **highly fragmented** industry. Management employs several models to navigate macroeconomic volatility. **1. Customer & Credit Concentration Risk** Revenue is highly concentrated, with **two customers** accounting for **53.20%** of total turnover in FY 24-25. Furthermore, the company has significant exposure to **Future Group** entities currently under **NCLT** proceedings: * **Future Enterprises Ltd:** **₹ 1,08,52,590** * **Future Retail Ltd:** **₹ 50,43,248** * **Future Lifestyle Fashion Ltd:** **₹ 88,23,286** * **Total NCLT Exposure:** **₹ 2.47 Crore** (No specific provisions have been made for these amounts to date). **2. Trade Receivables Ageing (As of March 31, 2024)** | 0-90 Days | 91-180 Days | 181-365 Days | Above 365 Days | Total | | :--- | :--- | :--- | :--- | :--- | | **₹ 7.49 Cr** | **₹ 0.45 Cr** | **₹ 0.12 Cr** | **₹ 2.52 Cr** | **₹ 10.58 Cr** | **3. Operational & External Risks** * **Input Costs:** Volatility in **Cotton, Dyes, Chemicals, and Coal** prices. Spenta uses a **FIFO** inventory method and a price review mechanism to mitigate these fluctuations. * **Credit Rating:** Currently rated **CRISIL BB-/Stable** (valid through **June 2025**), reflecting a healthy capital structure but a moderate scale of operations. * **Legal Contingencies:** Includes a pending **₹ 89.35 Lakh** insurance claim from a 2008 fire and ongoing disputes regarding **EPCG export obligations** related to machinery destroyed in 2004. --- ### **Leadership & Governance** The company is led by a stable management team with recently renewed mandates to ensure strategic continuity: * **Mr. Sanjay Shyamsunder Gadodia (Chairman, WTD & CEO):** Re-appointed for a **3-year term** effective **July 1, 2024**, through **June 30, 2027**. * **Mr. Danny Hansotia (Managing Director):** Re-appointed for a **3-year term** effective **December 1, 2023**, through **November 30, 2026**, with a remuneration package of **₹ 2,50,000 per month** plus performance-linked perquisites. * **Administrative Update:** Effective December 31, 2024, **MUFG Intime India Private Limited** serves as the Registrar & Transfer Agent.