Filatex India Limited has made a strategic investment in its wholly owned subsidiary, Texfil Private Limited, through a rights issue. The company disclosed under Regulation 30 of SEBI Listing Regulations that it acquired additional equity shares of Texfil for Rs 15.00 crore on January 16, 2026.

Investment Transaction Details

The latest investment represents a significant capital infusion into the subsidiary's operations:

Fund Utilization Strategy

The investment proceeds will be deployed across three key areas to strengthen Texfil's operational capabilities:

Polyester Textiles Recycling Project: A significant portion of the funds will finance the ongoing recycling project, demonstrating the company's commitment to sustainable textile production practices.

Loan Repayment: The investment will enable Texfil to repay existing loans from Filatex India Limited, improving the subsidiary's financial structure and reducing inter-company obligations.

Working Capital Enhancement: Additional funds will support Texfil's working capital requirements, potentially boosting operational efficiency and growth prospects.

Regulatory and Transaction Framework

As disclosed in the regulatory filing, this transaction constitutes a related party transaction conducted on an arm's length basis. The company confirmed that no promoter, promoter group, or other group companies have any interest in this transaction. Additionally, no governmental or regulatory approvals were required for this acquisition.

This strategic move reinforces Filatex India's commitment to strengthening its subsidiary's financial position while focusing on sustainable business practices through the recycling project. The investment is expected to enhance Texfil's operational capabilities and contribute to the group's consolidated performance in upcoming quarters.

Filatex India Limited, a leading polyester manufacturer, has reported a robust performance for the second quarter of fiscal year 2026, showcasing growth across key financial metrics and progressing well on its expansion plans.

Financial Highlights

The company reported a quarter-on-quarter revenue growth to INR 1,076.00 crores in Q2 FY26, up from INR 1,049.00 crores in the previous quarter. This growth was supported by an increase in sales volume, which rose to 101,391 metric tonnes from 97,263 metric tonnes.

Filatex India's profitability saw significant improvement:

• EBITDA increased by 14.36% to INR 88.93 crores, compared to INR 77.76 crores in Q1 FY26.
• Profit After Tax (PAT) grew by 16.8% to INR 47.58 crores, up from INR 40.74 crores in the previous quarter.

For the first half of FY26, the company's performance remained strong:

• Revenue stood at INR 2,125.00 crores, slightly up from INR 2,103.00 crores in H1 FY25.
• EBITDA showed substantial improvement, reaching INR 166.70 crores compared to INR 106.60 crores in the same period last year.
• PAT nearly doubled to INR 88.32 crores from INR 45.77 crores year-on-year.

Expansion and Sustainability Initiatives

Filatex India is progressing well with its INR 650.00 crores investment plan, which covers capacity expansion, sustainability, and energy efficiency projects. Key highlights include:

1. Yarn Capacity Expansion: A INR 235.00 crores project is underway, with major machinery orders placed. The company expects completion by September 2026.

2. Recycling Project: Civil construction has begun, and major equipment orders have been placed. Production is scheduled to commence by September 2026.

3. Steam Infrastructure Project: Implementation is in progress with turbine orders placed and pipeline work advancing. The company anticipates completion by June 2026.

4. Renewable Energy Initiative: The company has signed an MoU with Torrent Power and is awaiting statutory approvals.

5. Automation in Post-Winding Operations: A INR 40.00 crores investment in automating labor-intensive processes like docking and packing of FDY and POY lines is underway, with equipment shipments expected to begin soon.

Industry Outlook and Management Commentary

Madhu Sudhan Bhageria, Chairman and Managing Director of Filatex India, expressed optimism about the company's performance and future prospects. He stated, "We are confident that we should do an EBITDA of around INR 80.00 crores to INR 85.00 crores in the recycled fiber business."

The management expects EBITDA margins to improve to 8.5% to 9% in the second half of FY26 from the current 7.84% in the first half. They also anticipate a margin improvement of around 2% when upcoming PTA capacity additions by GAIL and IOCL become operational.

Market Dynamics and Future Prospects

Filatex India is well-positioned to benefit from several industry trends:

• The upcoming PTA capacity additions in India are expected to reduce dependence on imports and improve supply chain stability.
• The company is exploring opportunities in recycled polyester, with plans to produce chips from waste materials.
• Domestic demand for polyester yarn remains stable, with encouraging signs of recovery visible in the downstream textile value chain.

In conclusion, Filatex India Limited's strong Q2 FY26 performance, coupled with its strategic investments in capacity expansion and sustainability initiatives, positions the company well for future growth in the evolving polyester market landscape.