Zenith Exports Limited is an Indian-domiciled manufacturer and exporter specializing in **leather goods** and **textile fabrics**. With a corporate history spanning several decades, the company is currently undergoing a strategic realignment to navigate shifting global demand, transitioning from high-end luxury textiles to competitive industrial safety gear and mid-range fabrics. The company maintains a global footprint, leveraging **ISO 9001:2015** and **ISO 14001:2015** certifications to serve markets in the **USA, Europe, and Asia**. --- ### **Core Business Divisions and Operational Status** Zenith Exports operates through three distinct verticals, each currently at a different stage of operational evolution: | Division | Location | Primary Activity | Current Status | | :--- | :--- | :--- | :--- | | **Trading Division (Exports)** | Kolkata, West Bengal | **Industrial Leather Hand Gloves**, Silk/Cotton fabrics, and handloom made-ups | **Active & Profitable**; the primary driver of current company earnings. | | **Weaving (Zenith Textiles)** | Nanjangud, Karnataka | Manufacturing high-quality **Silk and Velvet fabrics** | **Transitioning** from a 100% Export Oriented Unit (EOU) to a Domestic Tariff Area (DTA) unit as of **Nov 2024**. | | **Spinning (Zenith Spinners)** | Dholka, Ahmedabad | Historically yarn manufacturing; currently **Cotton trading** | **Suspended** manufacturing since **Dec 2015**; pivoted to trading in **Jan 2019**. Recorded **zero sales** in FY 2024-25. | --- ### **Financial Performance Summary** While the company saw a contraction in total turnover in the most recent fiscal year, net profitability has shown a steady upward trajectory over a four-year cycle. #### **Consolidated Financial Metrics** | Metric (₹ in Crore) | FY 2024-25 | FY 2023-24 | FY 2022-23 | FY 2021-22 | | :--- | :---: | :---: | :---: | :---: | | **Total Turnover** | **72.10** | **81.70** | **62.25** | **90.54** | | **Profit Before Tax (PBT)** | **2.41** | **0.66** | **2.00** | **1.35** | | **Net Profit After Tax (PAT)** | **1.72** | **0.53** | **1.58** | **1.02** | #### **Segment Profitability (FY 2024-25)** The **Trading Division** remains the sole profit center, offsetting losses in the manufacturing segments: * **Trading Division:** Sales of **₹59.41 Crore** with a Net Profit of **₹6.61 Crore**. * **Weaving Division:** Sales of **₹9.90 Crore** with a Net Loss of **₹(4.76) Crore**. * **Spinning Division:** Sales of **₹0.00** with a Net Loss of **₹(0.13) Crore**. --- ### **Strategic Pivot: "China Plus One" and Product Realignment** Zenith is aggressively positioning itself to capture market share as global buyers shift supply chains away from China. * **Market Realignment:** Due to high costs and reduced demand for luxury silk in Western markets, the company has shifted focus to **less expensive qualities** and **mid-range products** to maintain volume. * **Technical & Health Textiles:** Development of specialized fabrics with **anti-microbial inherent properties** and **anti-Covid finishes** to meet new global safety standards. * **Industrial Safety Focus:** Targeting the **Global Industrial Leather Gloves** market. Management identifies this as a high-growth area where India’s current participation is minimal compared to its potential. * **Asset Monetization:** In **April 2026**, the Board approved the sale of a **40-50 year old property** in the **JVPD scheme, Mumbai**. The proceeds are earmarked for reallocation into core business operations and debt optimization. --- ### **Capital Structure and Governance** * **Equity Base:** Paid-up Equity Capital stands at **₹5,39,62,500**, consisting of **53,96,250** shares at a face value of **₹10** each. * **Dividend Status:** No dividend was recommended for **FY 2022-23 through FY 2024-25** due to the need to offset accumulated losses. * **Credit Rating:** **ICRA** has reaffirmed a Long-term rating of **[ICRA] B+ (Stable)** and a Short-term rating of **[ICRA] A4**. * **Leadership:** **Mr. Varun Loyalka** was re-appointed as Managing Director for a 3-year term ending **September 2027**. The board was recently strengthened with the appointments of **Mrs. Priyanka Poddar** and **Mrs. Rasna Goyal** as Independent Directors through **March 2031**. --- ### **Risk Profile and Mitigation Strategies** #### **1. Regulatory and Compliance Risks** The company has faced historical challenges regarding **SEBI (LODR) Regulations**: * **Board Composition:** Non-compliance with **Regulation 17(1)** occurred in late 2025 due to shareholder dissent in director appointments; compliance was restored in **March 2026**. * **Penalties:** Paid **₹3,34,687** in 2025 for a promoter disclosure delay and **₹70,800** (each to BSE/NSE) in 2022-23 for Related Party Disclosure lapses. #### **2. Financial and Market Risks** * **Currency Volatility:** With heavy export reliance, the company is exposed to **USD, EURO, and GBP** fluctuations. It utilizes **hedging strategies** to stabilize INR cash flows. * **Credit Risk:** Mitigation includes rigorous **customer creditworthiness** checks, **advance payment** requirements, and the use of **Letters of Credit (LC)**. * **Input Costs:** Profitability is sensitive to "abnormal" increases in raw material costs and uncertainty regarding government **export benefit rates**. #### **3. Operational and Macro Risks** * **Global Competition:** Intense pressure from large-scale Indian mills and low-cost exporting nations like **Bangladesh and Vietnam**. * **Labor Framework:** Transitioning to the **New Labour Codes** (effective **Nov 2025**). While past service costs are currently deemed non-material, the final financial impact is pending full state-level notification. * **Agricultural Exposure:** For its **Eucalyptus tree cultivation** segment, the company faces risks from weather and fire, mitigated by high inventories of agrochemicals. --- ### **Future Outlook** Zenith Exports is currently a "turnaround" prospect focused on **operational efficiency** and **cost optimization**. By transitioning the Nanjangud weaving unit to a **Domestic Tariff Area (DTA)** and liquidating non-core real estate assets, the company aims to improve liquidity and pivot toward high-volume industrial safety products and sustainable "branded" textiles.