1. Ready-to-wear women apparel - launch by September 2021 Delivered - In the FY21 Annual Report, management stated plans to introduce ready-to-wear women apparel such as Tops and Tunics by September 2021. The company launched its first Ready-to-Wear garments for women and men in August 2021, ahead of the September 2021 deadline.
2. 2.2 MW rooftop solar project - 27 lakh units annually Pending - In the FY25 Annual Report, the company disclosed it is investing in a 2.2 MW rooftop solar project expected to generate 27 lakh units annually. Our record holds no disclosure of the project's completion or generation actuals, while the same report notes power tariffs at the SPFY unit continue to rise.
3. Gearing not to exceed 0.50x despite debt-funded capex Missed - In the CARE rating rationale dated 8th October 2021, management stated that overall gearing is not expected to deteriorate above 0.50x in coming years. The debt-to-equity ratio stood at 0.72 in FY24, improved to 0.59 in FY25, and was 0.54 in FY26, remaining above the 0.50x threshold in each completed year.
4. Operating margin around 11-12% going forward Missed - In the CARE rating rationale dated 8th October 2021, management expected to maintain operating margin around 11-12% going forward. Operating margin was 8.47% in FY22, 3.97% in FY23, 6.57% in FY24, 6.73% in FY25, and 4.05% in FY26, never reaching the 11-12% range in any subsequent completed fiscal year.
5. Embroidery modernisation - Degaon unit, commercial production from Q3 FY24 Partial - In the FY23 Annual Report, management stated the Degaon embroidery modernisation with 8 new-generation machines was scheduled for full commercial utilisation in Q3 of FY24, with additional revenue potential of ₹50 cr per annum. Commercial production commenced in August 2023 and the unit was operational with an investment of approximately ₹41 crore, but the first full year of enhanced capacity did not realise its potential due to inadequate demand.
6. SPFY capacity expansion to 26,000 MT - fully operational by Q4 FY23 Partial - In the FY22 Annual Report, management guided the SPFY capacity expansion to 26,000 MT per annum would be fully operational by Q4 FY23, with sales potential of Rs 100-110 crore at full utilisation. Spinning capacity went on stream beginning June 2023 and value-added POY and DTY capacities by end-September 2023, but the sales potential was not fully realised in FY24-25 due to inadequate demand.
7. New commercial product every month Pending - At the Q2 FY22 call, management stated the target is to have a new commercial product every month. Our record holds no month-by-month disclosure of new product launches, though the FY24 and FY25 annual reports note development of biodegradable and camouflage yarns.
8. Rs.8 crore debt repayment in FY22 Delivered - At the Q4 FY21 call, the CFO stated that Rs.8 crore of debt will be payable in FY22. The company had a debt repayment obligation of Rs.8.94 crore in FY22 against gross cash accruals of Rs.25 crore, and no evidence of default exists in our record.
9. No tax liability in FY22 Partial - At the Q4 FY21 call, the CFO stated that no tax liability will be paid in FY22 due to carry-forward losses. The Q2 FY22 transcript shows a tax charge of ₹11 mn in Q1 FY22 and ₹14 mn in Q2 FY22, indicating some tax outgo occurred during the year.