Pashupati Cotspin Limited is a vertically integrated textile manufacturer based in the high-yield cotton belt of **Gujarat**. The company manages the complete transformation of raw cotton (Kapas) into high-quality bales and yarn. Established as a partnership in **2013** and converted to a Public Limited Company in **2017**, the firm has recently achieved a significant milestone by migrating from the **NSE Emerge (SME)** platform to the **Main Boards** of both the **National Stock Exchange (NSE)** and **BSE Limited** on **July 17, 2025**. --- ### **Strategic Geographic Advantage & Integrated Operations** The company’s operational hub is located in **Kadi, Mehsana (Gujarat)**, a region globally recognized for the production of the **Shankar-6** cotton variety. This strategic location provides a dual advantage: direct access to high-quality raw materials from local farmers and proximity to the **Mundra** and **Kandla** ports, facilitating efficient export logistics. Pashupati operates an integrated business model that captures value across multiple stages of the textile chain: * **Ginning Division:** Processes raw Kapas into cotton bales. These serve as both a merchant product for external sale and a captive raw material for the spinning unit. * **Spinning Division:** Converts cotton bales into high-grade yarn. The facility utilizes a **Bale Management System** to ensure uniform quality and employs auto-coning technology achieving **85% splice strength**. * **Weaving & Finishing:** Produces value-added products including **Yarn Beams**, **Greige Fabric**, and **Finished Fabric**. * **By-product Monetization:** Maximizes resource efficiency by processing cotton seeds into **Seed Cake** (animal feed), **Wash Oil**, **Black Seed**, and **Linter** (used in industrial paper and plastics). --- ### **Energy Efficiency & Infrastructure Profile** To mitigate rising power tariffs—a significant cost driver in textile manufacturing—the company has invested heavily in a diversified renewable energy portfolio. | Asset Type | Capacity / Output | | :--- | :--- | | **Solar Rooftop** | **2.7 MW** | | **Ground-mounted Solar** | **9.50 MW** | | **Wind Power (Hybrid/Standalone)** | **5.4 MW** | | **Total Annual Solar Generation** | **~1.9 Crore units** | | **Total Annual Wind Generation** | **~1.5 Crore units** | --- ### **Capital Market Evolution & Liquidity Strategy** Following its migration to the Main Board, the company has aggressively pursued strategies to enhance shareholder value, improve stock liquidity, and strengthen its balance sheet. * **Stock Split (2026):** The Board has approved a sub-division of equity shares from a Face Value of **₹10** to **₹1**. The record date is set for **April 17, 2026**, aimed at broadening the retail shareholder base. * **Capital Raise (QIP):** On **October 29, 2024**, the company successfully raised **₹24.05 Crore** through a Qualified Institutional Placement. It issued **5,00,000** shares (pre-split) at **₹481.00** per share. * **Utilization of Funds:** Proceeds were earmarked for **Capacity Expansion**, the repayment of high-cost debt, and augmenting working capital to support a larger scale of operations. * **Authorized Capital Expansion:** To facilitate growth and the stock split, the company increased its Authorized Share Capital to **₹16,00,00,000**. --- ### **Financial Performance & Solvency Metrics** Pashupati Cotspin maintains an above-average financial risk profile, characterized by a significant reduction in leverage following its recent capital infusion. **Key Financial Indicators (Standalone):** | Metric | FY 2024-25 | FY 2023-24 | | :--- | :--- | :--- | | **Total Net Sales** | **₹636.70 Cr** | **₹658.38 Cr** | | **Net Profit After Tax (PAT)** | **₹12.88 Cr** | **₹8.30 Cr** | | **Adjusted Tangible Net Worth** | **₹119.93 Cr** | **₹76.39 Cr** | | **Overall Adjusted Gearing** | **0.85x** | **2.56x** | | **Current Ratio** | **1.68x** | **—** | | **Interest Coverage Ratio** | **2.68x** | **—** | **Liquidity & Debt Position:** * **Cash Accruals:** The company generated **₹26 Cr** in Gross Cash Accruals against debt repayments of **₹23.22 Cr**. * **Debt Reduction:** Long-term secured term loans were reduced to **₹25.56 Cr** in FY25, down from **₹45.84 Cr** in the previous year. * **Working Capital:** Average utilization of fund-based limits stands at a comfortable **61.38%**. * **Dividends:** A final dividend of **5% (₹0.50 per share)** was recommended for FY 2024-25. --- ### **Corporate Structure & Governance** The company operates through a mix of subsidiaries and associates to manage its diverse textile interests: * **Pashupati Cotyarn LLP:** A **99.00%** owned subsidiary focused on yarn processing. * **Pashupati Texspin Export LLP:** A key associate entity. The company has authorized related-party transactions with this LLP up to **₹500 Crore** per annum and provides a corporate guarantee of **₹1.96 Crore**. * **Leadership:** The core management team, including MD **Saurin Jagdish Bhai Parikh** and WTD **Tushar Rameshchandra Trivedi**, has been re-appointed through **July 2028**. The appointment of **Ripple Jamnadas Patel** as an Independent Director through **2030** signals a commitment to enhanced governance standards post-migration. --- ### **Risk Factors & Operational Challenges** Investors should note the following headwinds and contingent liabilities: * **Seasonality:** The ginning business is active only from **October to April**. This creates inherent volatility in half-yearly financial comparisons. * **Raw Material & Production Risks:** Profitability is tied to the **Minimum Support Price (MSP)** and crop yields, which have recently seen a **~5% YoY decline** due to pests like the **pink bollworm**. * **Contingent Liabilities:** * **GST Disputes:** **₹5.66 Cr** related to discrepancies in FY 2017-18 and 2018-19. * **Interest Rate Litigation:** The company is contesting **₹51.63 Lakhs** in "arbitrary" interest charges by **PNB** and **SBI**. * **Guarantees:** Outstanding bank guarantees of **₹4.18 Cr** are held in favor of Gujarat energy utilities. * **Global Macro:** Exports face pressure from the **Red Sea crisis** and sluggish demand in **Europe and the US**. * **Regulatory:** The company is currently transitioning to **Ind AS** (effective April 1, 2025) and evaluating the impact of the **2021 Labour Codes**. ### **Investment Outlook** With the successful completion of its **EPCG Scheme** export obligations (now **Nil**) and the absence of major immediate CAPEX plans, Pashupati Cotspin is positioned to utilize its strengthened net worth to optimize existing assets. The transition to the Main Board and the upcoming stock split are intended to align the company with institutional investment standards while leveraging its integrated "farm-to-fabric" capabilities in the heart of India's cotton country.