Sangam (India) Limited has entered into a significant contract with IB Vogt Solar for the development of a 27 MW solar power project, marking a strategic expansion into the renewable energy sector for the textile manufacturer.

Project Details

The partnership between Sangam (India) and IB Vogt Solar encompasses the development of a substantial solar power installation with a capacity of 27 MW. This collaboration represents a notable diversification move for the company, which has traditionally operated in the textile industry.

Strategic Significance

The contract signing demonstrates Sangam (India)'s strategic initiative to expand beyond its core textile business into the rapidly growing renewable energy sector. This move aligns with India's national focus on increasing solar power capacity and achieving renewable energy targets.

IB Vogt Solar brings specialized expertise in solar project development to this partnership, providing the technical knowledge and experience necessary for successful project implementation. The collaboration leverages the strengths of both companies to deliver a significant solar power installation.

Business Diversification

This solar power project represents a meaningful step in Sangam (India)'s business diversification strategy. By entering the renewable energy sector, the company is positioning itself to participate in India's expanding clean energy market while maintaining its established textile operations.

The 27 MW capacity of the planned solar installation indicates a substantial commitment to renewable energy development, reflecting the company's confidence in the sector's growth potential and long-term viability.

Sangam India Limited , a leading textile manufacturer, has reported a strong financial performance for the second quarter of fiscal year 2026, with significant growth in both revenue and profitability.

Key Financial Highlights

• Revenue reached INR 785.00 crores, marking a 16% year-on-year growth
• EBITDA increased by 32% year-on-year to INR 76.00 crores
• EBITDA margin expanded by 120 basis points to 9.6%
• Net profit for the quarter stood at INR 23.00 crores

Drivers of Growth

The company's impressive performance was attributed to several factors:

1. Higher Volumes: Increased production across various segments contributed to revenue growth.
2. Improved Product Mix: A strategic shift towards higher-margin products boosted profitability.
3. Operational Efficiencies: Better cost control measures helped expand margins.
4. Capacity Utilization: The company reported improved capacity utilization across its divisions.

Segment-wise Performance

Future Outlook

Sangam India Limited has expressed optimism about its future performance:

• The company expects 12-15% annual revenue growth in the coming quarters.
• Management anticipates a 1-2% expansion in margins.
• The garment division's capacity utilization is projected to reach 60-65% by next quarter.

Strategic Initiatives

1. Renewable Energy: A 12-megawatt captive renewable power tie-up in Rajasthan is expected to generate annual savings of about INR 10.00 crores, starting from December.
2. Depreciation Policy Revision: The company has revised its depreciation policy to align with actual economic life and industry benchmarks, which may impact profitability representation.
3. Debt Reduction: Plans to reduce debt by approximately INR 350.00 crores over the next three years, subject to no new major capex.

Market Dynamics

• The company maintains a balanced mix of domestic and export sales, with exports accounting for about 37% of revenue.
• Management noted that yarn prices have bottomed out, potentially stabilizing the market.
• Sangam India is relatively insulated from U.S. tariff impacts due to its limited direct exposure to the American market.

Sangam India Limited's strong Q2 FY26 performance demonstrates the company's resilience and strategic positioning in the textile industry. With a focus on operational excellence, cost efficiency, and sustainable growth, the company appears well-positioned to capitalize on market opportunities and drive shareholder value in the coming quarters.

Cautionary Statement

The company's future projections and strategic plans may be subject to market conditions, regulatory changes, and other external factors that could impact actual results.