Loyal Textile Mills Limited (**LTM**), established in **1956**, is a vertically integrated textile powerhouse and a Government-recognized **Four Star Export House**. The company operates across the entire textile value chain—from ginning and spinning to weaving, knitting, processing, and garmenting. Currently, LTM is undergoing a fundamental strategic pivot, transitioning from a commodity-focused manufacturer to a high-value specialist in **technical textiles** and **protective wear**. --- ### **Manufacturing Infrastructure & Operational Footprint** LTM maintains a robust manufacturing presence across South India, though it is currently consolidating its footprint to optimize costs. As of **February 2025**, the company’s aggregate production infrastructure includes: * **Spinning:** **1,06,783 ring spindles** and **4,848 rotors**. * **Weaving:** **384 automatic looms** (including **450 Air-Jet looms** across units) capable of producing widths from **50 to 134 inches** with a capacity of **150,000 meters/day**. * **Knitting:** **270 knitting machines** (including **220** high-efficiency units). * **Garmenting:** **1,894 sewing machines**. #### **Plant Locations and Status** | Plant Location | Operations | Current Status | | :--- | :--- | :--- | | **Kovilpatti, TN** | Spinning, Knitting, Weaving, Ginning & Garments | Active | | **Sattur, TN** | Spinning, Knitting, Weaving, Ginning & Garments | Active | | **Sivagangai, TN** | Spinning, Knitting, Weaving, Ginning & Garments | Active | | **Cuddalore, TN** | Processing | Active | | **Khammam, TS** | Spinning, Knitting, Weaving, Ginning & Garments | Active | | **Naidupeta, AP** | Spinning, Knitting, Weaving, Ginning & Garments | **Under Slump Sale Process** | | **Arasanur, TN** | Manufacturing Unit | **Proposed for Sale** | --- ### **Product Portfolio & Value-Added Innovation** The company has shifted its production mix to prioritize downstream, higher-margin segments. Approximately **75%** of yarn produced is now consumed captively to insulate the business from cotton price volatility. * **Yarn Spinning:** Produces counts from **Ne 6’s to Ne 120’s** (primary focus on **40s**). Innovations include **Triblend yarn** (Cotton/Polyester/Viscose) and **Recycled Cotton yarn** derived from autoconer waste. * **Woven & Knitted Fabrics:** Offers a vast range of weaves (Twill, Dobby, Herringbone, etc.) and knit types (Single jersey, Inter-lock, Fleece). Notably, **23 knitting machines** were recently converted to fleece production to meet specific market demand. * **Technical Textiles & Garments:** This is the company's primary growth engine. LTM specializes in **flame-resistant garments** for thermal and electrical environments. The segment is growing at **10% per annum**. * **Efficiency Gains:** Recent installation of **17.5 wharve dia** spindles has boosted productivity by **7%**, while carbon fans and inverter conversions have yielded **1-3% energy savings**. --- ### **Strategic Turnaround & Asset Monetization** To address recent liquidity challenges and a global demand slowdown, management is executing a "Business Realignment Plan" focused on deleveraging the balance sheet. * **Asset Divestment:** LTM is aggressively monetizing non-core assets to improve cash flow. * **Windmills:** Sold **7 units** in FY25; **18 additional units** held for sale. Total consideration for **25 units** is **INR 73.80 crore**. * **Real Estate:** Sold land/property for a profit of **INR 40.92 crore** in Feb 2025. * **Exceptional Income:** Reported **INR 81.36 crore** and **INR 10.72 crore** in various periods from asset disposals. * **PM-MITRA Park:** LTM signed an MOU with the Tamil Nadu government for a **Technical Textiles project** in Virudhunagar, aiming for a fully integrated "yarn-to-garment" facility. * **Corporate Streamlining:** Dissolved dormant international subsidiaries in the **UK, Greece, and Portugal** to focus on the core Indian operations and the **Gruppo P&P Loyal S.p.A. (Italy)** joint venture. --- ### **Energy & Sustainability Profile** LTM is a leader in captive renewable energy, which significantly offsets rising power costs. * **Renewable Mix:** Approximately **40%** of power requirements are met through captive sources. * **Capacity:** **46 MW** of Wind Power (partially being monetized) and **6 MW** of Solar Power (**3.3 MW** captive; **3 MW** under BOOT model). * **Conservation:** Ongoing initiatives target annual savings of **3 to 5 lakh units** through motor and fan optimizations. --- ### **Financial Performance & Credit Metrics** The company is navigating a period of "stretched" liquidity, with a focus on returning to profitability by **FY 2025-26**. | Metric | FY 2024-25 (H1/Est) | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Export % of Revenue** | **56%** | **39%** | **~75%** | | **Net Profit / (Loss)** | **(Loss)** | **(INR 42.63 Cr)** | **INR 1.23 Cr** | | **Overall Gearing** | - | **2.15x** | **1.99x** | | **Promoter Holding** | **73.49%** | **73.49%** | **73.49%** | * **Credit Rating (Feb 2026):** Reaffirmed at **CARE BB+; Stable / CARE A4+**. * **Debt Status:** The company has **NIL long-term debt obligations**; all remaining debt is related to working capital. * **Dividend:** No dividend recommended for the last three years to conserve capital for the turnaround. --- ### **Risk Factors & Mitigation** * **Market Volatility:** Exposure to cotton price fluctuations (ranging from **₹60k to ₹1L per candy**) is mitigated by high captive consumption and derivative hedging. * **Geopolitical Headwinds:** U.S. trade tariffs and the Red Sea crisis have impacted margins. LTM is countering this by diversifying into **Europe, the Middle East, and Australia**. * **Liquidity Risk:** While auditors have noted recurring losses, the **INR 28.6 crore** AP power subsidy and ongoing asset sales provide a liquidity cushion. * **Labor Risk:** The industry faces high turnover; LTM is addressing this through structured recruitment and skill development for **skilled tailors** to ensure garmenting output targets are met. * **Regulatory Compliance:** The company is working to resolve an **Emphasis of Matter** regarding the consolidation of its Italian JV based on unaudited results, ensuring alignment with **Regulation 33(3)(h)**.