A textile company based in Tamil Nadu, India, Loyal Textiles Mill has initiated a major restructuring of its operations by focusing on high-value technical textile garments, a segment experiencing strong and consistent demand. Technical textiles are fabrics engineered for functional, non-aesthetic purposes.
This strategic pivot comes as the company has faced significant losses due to a prolonged global slowdown in demand, which led to underutilized production capacities. This situation negatively impacted Loyal Textiles' overall liquidity, stated Valli M Ramaswami, Chairperson and Wholetime Director in the latest earnings report.
To address these challenges, the company has implemented various cost-control measures and productivity-enhancement initiatives. These efforts aim to reduce operational costs, streamline processes, and boost both efficiency and capacity utilization. Additionally, Loyal Textiles plans to monetize non-core assets to generate much-needed liquidity and support its operational cash flows. The management expressed confidence that these ongoing actions will help the company achieve operational profitability in the upcoming year.
In a move to further strengthen its financial position, Loyal Textiles entered into an agreement in March to sell a portion of its windmill units through Anuvento Renewables. The company has finalized the sale of 25 windmill units to various buyers for Rs 74 crore. This sale is a key part of the company's strategy to reduce its debt burden and redirect focus towards its core textile businesses.
Loyal Textiles manufactures a range of products including yarn, woven fabric, knitted fabric, and technical clothing. The company operates manufacturing plants in several locations: Kovilpatti, Sattur, Cuddalore, and Sivagangai in Tamil Nadu, and Naidupeta in Andhra Pradesh.
In Q4, FY25, Loyal Textiles reported a net profit of Rs 39 crore and revenue of Rs 146 crore. This profit was significantly boosted by an exceptional item of Rs 63 crore.
However, for the full FY25, the company's net loss increased to Rs 51 crore from Rs 39 crore in the previous fiscal year. Revenue for FY25 saw a substantial decline of 27 per cent, falling to Rs 682 crore from Rs 939 crore in the prior year.
