Sanathan Textiles Limited has announced its financial results for the third quarter ended December 31, 2025, presenting a contrasting performance between its standalone and consolidated operations. While the standalone business showed modest growth, the consolidated results reflected operational challenges.

Standalone Financial Performance

The company's standalone operations demonstrated resilience with steady revenue growth and improved profitability metrics. Revenue from operations increased to ₹768.07 crores in Q3FY26 compared to ₹741.13 crores in the corresponding quarter of the previous year.

For the nine-month period ended December 31, 2025, standalone revenue reached ₹2,285.04 crores compared to ₹2,265.63 crores in the previous year. Net profit for the nine-month period stood at ₹135.92 crores versus ₹124.61 crores, marking a 9.08% increase.

Consolidated Results Show Challenges

The consolidated performance painted a different picture, with the company reporting a net loss of ₹4.77 crores in Q3FY26 against a profit of ₹34.17 crores in Q3FY25. This significant decline was primarily attributed to increased operational expenses and higher finance costs.

Despite the quarterly loss, the nine-month consolidated performance remained positive with a net profit of ₹55.78 crores, though this was significantly lower than ₹116.80 crores in the corresponding period last year.

Operational Highlights

The company's cost structure showed mixed trends across different expense categories. Cost of materials consumed increased substantially in consolidated results to ₹769.29 crores from ₹517.74 crores year-on-year. Finance costs also rose significantly to ₹35.83 crores compared to ₹5.22 crores in the previous year, indicating higher borrowing costs or increased debt levels.

Employee benefits expenses grew to ₹35.70 crores from ₹24.75 crores, reflecting expansion in workforce or salary increments. The company recorded an incremental financial impact of ₹2.70 crores in consolidated results due to new Labour Codes implemented effective November 21, 2025.

Board Decisions and Corporate Governance

The Board of Directors, in their meeting held on February 6, 2026, approved several important decisions:

Mrs. Rupal Vora brings over 25 years of legal and financial expertise, specializing in direct tax advisory and financial planning. She holds qualifications from the University of Mumbai and is a certified Independent Director from the Indian Institute of Corporate Affairs.

Business Segment and Outlook

Sanathan Textiles operates primarily in yarn manufacturing, which has been identified as a single business operating segment. The company maintains manufacturing facilities in Silvassa, Dadra and Nagar Haveli, with two operational units strategically located for optimal production efficiency.

The financial results were reviewed by the Audit Committee and approved by the Board of Directors, with statutory auditors Walker Chandiok & Co LLP providing limited review reports for both standalone and consolidated results.

Sanathan Textiles Limited , a prominent player in the Indian textile industry, has reported full compliance with its stated objectives for the utilization of funds raised through its Initial Public Offer (IPO). The company's monitoring agency report for the quarter ended September 30, 2025, confirms that there has been no deviation from the planned use of IPO proceeds.

IPO Details and Fund Allocation

Sanathan Textiles raised INR 550.00 crore through its IPO in December 2024, with net proceeds of INR 370.95 crore after deducting issue-related expenses. The funds were earmarked for specific purposes:

1. Repayment of borrowings: INR 160.00 crore
2. Investment in subsidiary Sanathan Polycot Private Limited for debt repayment: INR 140.00 crore
3. General corporate purposes: INR 70.95 crore

Fund Utilization Status

As of September 30, 2025, the company has reported the following utilization:

The report indicates that the company has fully utilized the funds allocated for repayment of borrowings, investment in its subsidiary, and general corporate purposes. A small portion of the issue-related expenses remains unutilized, with the company awaiting invoices and supporting documents from service providers.

Monitoring Agency's Observations

ICRA Limited, the appointed monitoring agency, has confirmed that the fund utilization is in line with the disclosed objects of the issue. The agency reported no deviations or delays in the implementation of the stated objectives.

Management Commentary

The monitoring agency report was reviewed by Sanathan Textiles' Audit Committee at its meeting held on November 5, 2025. The company has not provided specific management comments in the disclosed report.

Investor Implications

For investors, this report provides reassurance that Sanathan Textiles is adhering to its commitments made during the IPO. The full utilization of funds for debt repayment and investment in its subsidiary may potentially strengthen the company's financial position and support its growth strategies.

As Sanathan Textiles continues to execute its business plans, investors and market observers will likely keep a close watch on how these investments translate into operational and financial performance in the coming quarters.

The company's transparent reporting and compliance with regulatory requirements demonstrate its commitment to good corporate governance practices, which is often viewed positively by the investment community.