Loyal Textile Mills is a textile maker that does everything from cleaning raw cotton to stitching finished garments under one roof - a rare full-stack setup in an industry of specialists. Founded in 1956 in Tamil Nadu by Karumuttu Thiagaraja Chettiar, it grew into a government-recognised Four Star Export House that now sells roughly three-quarters of what it makes to customers across Asia, Europe and the Middle East. The recurring idea is vertical integration: own the ginning, spinning, weaving, knitting, processing and garmenting stages, so you control quality and cost at every step - and today that same logic is being redirected away from commodity yarn toward higher-value technical clothing where the margins are fatter. # Business segments Two engines at different stages of the same value chain - a commodity-scale yarn-and-fabric backbone that is being deliberately shrunk, and a garment-and-technical-textiles front end that the company is betting its future on - both fed by captive renewable power and a single export-facing sales pipeline. ## 1. Yarn and fabric manufacturing: the integrated backbone, now being pruned **The company spins, weaves and knits across four mill complexes, but it is actively selling off commodity-spinning assets and reducing outside yarn sales to focus its own output on feeding its higher-margin garment division.** - **Spinning at scale, from coarse to fine** - four spinning mills integrated with three ginning factories produce yarn in counts from Ne 6's to Ne 120's, covering 100% cotton, polyester and viscose-cotton blends, with FY25 output of about 1.03 crore kg. - **Woven fabric on 428 air-jet looms** - the weaving division runs 428 air-jet looms that turn out fabric in widths from 50 to 134 inches at a capacity of 1.5 lakh metres a day, supplying everything from home furnishing to work-wear and high-end technical textiles. - **Knitted fabric for captive use** - the knitting operation produced roughly 52 lakh kg of fabric in FY25, and the company has said it will gradually stop selling yarn to outsiders, optimising production to the level its own knitting units need. - **Deliberate shrinkage of the commodity base** - two spinning units at Kovilpatti and Naidupet were consolidated into one at Naidupet to cut fixed costs, and the company has now decided to sell or dispose of its manufacturing undertakings at Naidupet (Andhra Pradesh) and Arasanur (Tamil Nadu) entirely, exiting low-margin commodity segments to reduce debt. ## 2. Garments and technical textiles: the value leap the company is betting on **Stitching finished garments - especially flame-resistant and protective wear - is where the company sees its future, and it is expanding this division even as it shrinks the yarn business behind it.** - **From fabric to finished piece** - the garment division produced 32.27 lakh pieces in FY25, covering formal wear, casual wear, work wear and high-end technical-textile garments, all cut and sewn in-house from the company's own woven and knitted fabric. - **Fire-resistant clothing as a niche** - the company makes inherent FR (flame-retardant) viscose yarn, fabrics and garments suitable for thermal and electrical settings, a technical-textile segment where it has built a niche presence and where margins are higher than in commodity fabric. - **Capacity constrained by skilled hands** - the company is actively expanding garmenting capacity to meet rising demand, but a shortage of skilled tailors has temporarily held output back, so the bottleneck is labour, not orders. - **Innovation in sustainable and blended fabrics** - recent product development includes garments from recycled cotton, bamboo-recycled-cotton blends, modal-recycled-cotton mixtures, dobby-design fabrics and four-track knitting designs, all aimed at buyers who will pay for sustainability claims. # Renewable energy: the captive power advantage **The company generates roughly 40% of its own electricity from wind and solar, cutting its factory power bill and insulating itself from grid-price swings - though it is now selling some wind assets to pay down debt.** - **46 MW of wind, 3.3 MW of solar** - as of March 2023, installed captive capacity stood at 46 MW of windmills and 3.3 MW of solar, which together supplied about two-fifths of the company's total power draw, with the rest bought from third parties and the IEX power exchange. - **Solar locked in at a fixed price** - in FY23 the company tied up 3 MW of solar power under a BOOT (build-own-operate-transfer) model at Rs 4.2 per unit for 10 years, after which the assets become the company's own, giving long-term price certainty on that slice of supply. - **Windmills now being sold to reduce debt** - on 31 March 2025, the company agreed to sell 25 windmill units for Rs 73.8 crore as part of a strategic move to cut debt and refocus on the core textile business, so the captive-power footprint is being deliberately reduced. # Group structure and partners **The company runs one active joint venture in Italy that acts as its export channel into Europe, while all other historical joint ventures and its domestic subsidiary have been dissolved or wound up.** - **Italian joint venture handles European sales** - Gruppo P&P Loyal S.P.A, incorporated in Italy and 47.5%-owned by Loyal Textile Mills, sells garments and fabrics and buys reflective bands and trims, effectively serving as the company's European export desk. - **Everything else has been cleaned up** - a wholly owned domestic subsidiary, Loyal International Sourcing Private Limited, was struck off in November 2023 after being dormant since FY18, and three foreign joint ventures in Greece, the UK and Portugal have all been dissolved or are inoperative, with their carrying values fully impaired in FY23. - **Promoter group holds nearly three-quarters** - as of March 2022, promoters and promoter-group entities held 73.49% of the equity, with five corporate shareholders each owning more than 5% and the Chairperson, Valli M Ramaswami, serving as whole-time director alongside a professional CEO.