RSWM has executed a significant business transition, terminating its existing contract with Didwania Trading and immediately securing a new ₹52.00 crore agreement with Malik Heights on December 10, 2025. The textile company disclosed these developments in its regulatory filing, marking a strategic shift in its asset divestment plans.

Contract Termination and New Agreement

The company's original agreement with Didwania Trading Company for the sale of redundant and non-operational thermal power plant assets (2x23MW) was terminated on December 10, 2025, after Didwania Trading informed RSWM of their inability to complete the contract. On the same day, RSWM entered into a new agreement with Malik Heights, New Delhi, for the same assets at a total consideration of ₹52.00 crore.

Asset Divestment Strategy

The transaction involves the sale of redundant and non-operational thermal power plant assets, representing RSWM's continued focus on optimizing its asset portfolio. The company confirmed that Malik Heights is not a related party, ensuring the transaction's independence and regulatory compliance.

Business Impact

This seamless transition from one buyer to another demonstrates RSWM's ability to maintain business continuity and secure alternative arrangements when faced with contract challenges. The successful completion of a new agreement on the same day as the termination indicates strong market interest in the company's assets and effective business development capabilities in the competitive textile industry.

RSWM Limited , a leading textile manufacturer, has reported a significant turnaround in its financial performance for the second quarter of fiscal year 2026, despite facing challenges in the global textile industry.

Key Financial Highlights

• Profitability: RSWM achieved a profit after tax (PAT) of ₹6.30 crores in Q2 FY26, compared to a loss of ₹21.00 crores in the same quarter last year.
• Revenue: The company's revenue slightly declined by 1.4% year-on-year to ₹1,150.00 crores.
• EBITDA: Earnings before interest, taxes, depreciation, and amortization (EBITDA) surged by 85.6% YoY to ₹79.00 crores.
• EBITDA Margin: Margins expanded to 6.8% from 3.6% in the previous year.

Operational Performance

The company faced challenges due to lower capacity utilization in its melange and knit businesses. This was primarily attributed to the imposition of 50% tariffs on textile goods by the United States, which negatively impacted the entire supply chain.

Strategic Initiatives

RSWM has undertaken several strategic initiatives to improve its operational efficiency and financial performance:

1. Renewable Energy Investment: The company has invested in 70 MW of renewable energy capacity, aiming to achieve 70% green energy consumption. This is expected to result in annual savings of ₹30.00-40.00 crores.

2. Knit Division Expansion: RSWM announced a ₹92.00 crores investment to expand its knit division capacity from 700 to 900 tons monthly, including new printing facilities.

3. Financial Management: The company has reduced its finance costs by 11.5% YoY through better financial planning. It has also significantly reduced inventory by ₹121.00 crores and receivables by ₹51.00 crores compared to March 2025.

Industry Challenges

The textile industry is currently facing several challenges:

• The 50% U.S. tariffs on textile goods have disrupted the global textile supply chain.
• The removal of cotton import duty in India has negatively impacted cotton yarn prices by 5-6%.

Management Commentary

Rajeev Gupta, Joint Managing Director of RSWM Limited, commented on the results: "Despite the challenging environment, we have managed to turn around our performance through focused cost management and strategic initiatives. Our investments in renewable energy and capacity expansion are expected to drive long-term growth and profitability."

Outlook

While the company faces ongoing challenges due to global trade tensions and market dynamics, RSWM remains committed to its long-term growth strategy. The management expects the benefits of its recent investments and operational improvements to materialize in the coming quarters, potentially leading to sustained profitability and market competitiveness.

Investors and stakeholders will be closely watching how RSWM navigates the evolving industry landscape and capitalizes on its strategic initiatives in the coming months.