Himatsingka Seide Reports 9.3% Revenue Decline in Q2, Plans to Reduce US Exposure
Himatsingka Seide Limited reported a 9.3% decrease in consolidated revenue for Q2, primarily due to ongoing 50% US tariffs. The company's revenue dropped to ₹629.00 crores from ₹694.00 crores in the previous year. To mitigate impacts, Himatsingka is diversifying revenue streams, aiming to reduce US exposure to below 50% and expand in non-US markets. The company is exploring options to raise up to ₹500.00 crores for balance sheet deleveraging. Despite challenges, capacity utilization remains high in spinning (99%), sheeting (60%), and terry towel (66%) divisions. The India business continues to show consistent growth, with the company operating three brands domestically.
*this image is generated using AI for illustrative purposes only.
Himatsingka Seide Limited , a prominent player in the textile industry, has reported a 9.3% decline in consolidated revenue for the second quarter. The company's financial performance has been significantly impacted by ongoing US tariffs, prompting strategic shifts in its market focus and potential fundraising plans.
Key Financial Highlights
| Metric | Q2 | Q2 Previous Year | Change |
|---|---|---|---|
| Consolidated Revenue | ₹629.00 | ₹694.00 | -9.3% |
| Other Income | ₹77.70 | ₹6.00 | +1195% |
| Foreign Exchange Gains | ₹66.00 | - | - |
Impact of US Tariffs
The primary reason for the revenue decline is attributed to the ongoing 50% US tariffs, which have significantly affected Himatsingka Seide's revenue streams from the US markets. Despite these challenges, the company reports that the offtake of goods has remained largely stable, with only marginal impacts on the order book and shipments.
Strategic Response
To mitigate the impact of US tariffs, Himatsingka Seide is implementing several strategic initiatives:
- Diversification of Revenue Streams: The company aims to reduce its US exposure to below 50% over the next couple of years.
- Global Expansion: Himatsingka Seide is focusing on enhancing revenue from non-US jurisdictions, currently servicing 38 different markets.
- Domestic Market Growth: The company's India business continues to show consistent year-on-year growth, reinforcing its domestic presence.
- Brand Portfolio Expansion: In India, Himatsingka Seide operates with three brands - Himeya, Atmosphere, and Liv - catering to various price points and demographics.
Operational Performance
| Division | Capacity Utilization |
|---|---|
| Spinning | 99% |
| Sheeting | 60% |
| Terry Towel | 66% |
Financial Stability and Future Plans
- Net Debt: ₹2,436.00 crores in Q2, down from ₹2,680.00 crores in the same period last year.
- Equity Fundraising: The company is exploring options to raise up to ₹500.00 crores for balance sheet deleveraging, with plans to finalize within the next 12 months.
Management Commentary
Shrikant Himatsingka, Executive Vice-Chairman and Managing Director, stated, "We are focused on enhancing our global presence into non-US jurisdictions... Our India business continues to demonstrate consistent year-on-year growth, reinforcing the strength of our domestic presence and brand portfolio."
Outlook
Himatsingka Seide remains optimistic about future growth, particularly once the tariff issues are resolved. The company is concentrating on maximizing its installed capacities and expects demand from India and other non-US jurisdictions to continue showing encouraging trends.
As the textile industry navigates through these challenging times, Himatsingka Seide's strategic initiatives to diversify its market presence and strengthen its financial position could potentially position the company for more stable growth in the coming quarters.
Historical Stock Returns for Himatsingka Seide
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +2.58% | +6.89% | +6.59% | -21.78% | -20.88% | +3.21% |
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