RSWM Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

RSWM Ltd trades at ₹208, in a confirmed uptrend and 11 weeks into that stage. That is +19.5% against its own 200-day average. It sits at 92% of a 52-week range of ₹122 to ₹215. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (1 week and counting).

Today the stock is in a confirmed uptrend — week 11 of stage 2, confirmed. At ₹208 it trades +19.5% versus its 200-day average and sits at 92% of its 52-week range (₹122–₹215).

Against the market, two honest reads. Cumulative: over the last 10.4 years the stock moved +12% while the NIFTY 500 moved +280% — behind the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (1 week and counting; last ahead the week of 2026-07-31) — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

RSWM Ltd's story is not scored yet against the markers our research file set on 31 May 2026. Where it sits in its own cycle: Not stated in the research file. Still open: 6 documented contradictions across 4 calls: capex cost doubled, debt commitment reversed, savings estimate cut 60-70%, tariff impact initially downplayed then blamed as primary headwind.

Our read, 31 May 2026. Loss-to-profit inflection at a 0.61x book value — but management has misstated capex costs, timelines and savings projections across four consecutive calls.

What is proven. Loss-to-profit inflection at a 0.61x book value — but management has misstated capex costs, timelines and savings projections across four consecutive calls.

What is not proven yet. 6 documented contradictions across 4 calls: capex cost doubled, debt commitment reversed, savings estimate cut 60-70%, tariff impact initially downplayed then blamed as primary headwind.

The test written in advance. Management Credibility — Serial Guidance Contradictions — Management Credibility — Serial Guidance Contradictions by the next result.

The test written in advance. Capex Execution Risk — Rs 1,110 Cr In-Flight — Capex Execution Risk — Rs 1,110 Cr In-Flight by the next result.

The test written in advance. US Tariff and Global Demand Uncertainty — US Tariff and Global Demand Uncertainty If Q1 FY27 export revenue for knit and melange recovers above Q3 FY26 levels, the tariff-driven headwind is resolving. by the next result.

Lever 2 · Value-added mix — BUILDING. Chhata closure removed Rs 250 Cr low-margin revenue; 40,000 spindles shifted to PV dyed; knit printing capacity (120 tonnes/month) adds 5-7% margin premium on that segment. What proves it keeps working: Product Mix Shift — Value-Added and Printed Segments. It stops working if If Q3 FY27 knit project completes within Rs 202 Cr and on schedule, and Ratlam commissioning commences by Q1 FY27 as guided, management execution risk degrades to MEDIUM.

Lever 10 · New geographies — BUILDING. US interim FTA reduces tariffs 50% to 18%; EU-India FTA zeroes 8-12% tariffs levelling vs Bangladesh/Vietnam; UK FTA in implementation — export volume tailwind from late FY27. What proves it keeps working: FTA Market Access — US Interim Framework + EU + UK. It stops working if If Q3 FY27 knit project completes within Rs 202 Cr and on schedule, and Ratlam commissioning commences by Q1 FY27 as guided, management execution risk degrades to MEDIUM.

Lever 4 · Paying down debt — BUILDING. Working capital optimisation freed Rs 12.5 Cr annual interest; borrowings reduced Rs 111 Cr to Rs 1,510 Cr; repo rate cuts contributed Rs 3-4 Cr/quarter reduction. What proves it keeps working: Interest Cost Reduction via Working Capital and Deleveraging. It stops working if If Q3 FY27 knit project completes within Rs 202 Cr and on schedule, and Ratlam commissioning commences by Q1 FY27 as guided, management execution risk degrades to MEDIUM.

Sources: our stock research file (31 May 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

RSWM Ltd reported ₹1,161 Cr of revenue in the Jun 26 quarter, −0.8% year on year. Over 10 years it has compounded at 4.5% a year. The last full year, FY26, came in at ₹4,554 Cr. The last four reported quarters add to ₹4,545 Cr.

Why this happened. Three trade agreements are in various stages of implementation. The US-India interim trade framework (Feb 2026) reduces the textile tariff from 50% to 18%, materially improving competitiveness of Indian garmenters who buy RSWM's denim and knit fabrics. The EU-India FTA (Jan 2026) zeros the 8-12% tariff, creating a level playing field against Bangladesh, Vietnam, and Turkey in a US$250 billion annual EU textile market. UK and New Zealand FTAs are in later stages (late FY27 expected). Management identified EU textile export potential growing from current Rs 8 billion to Rs 35-40 billion with CAGR of 8-10% as the tariff advantage compounds. RSWM benefits indirectly — it supplies to garmenters…

FY26 revenue came in at ₹4,554 Cr (−5.6% on the year), capping 10 years at 4.5% compound. The latest quarter (Jun 26) printed ₹1,161 Cr, −0.8% year on year.

Pace check: the last four quarters averaged −5.0% growth against the decade's 4.5% — the current year is running slower than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew −5.1% over the last 4 quarters against +2.1%/yr over the last 8 — rolling over.

FY26-Q4. revenue ₹1,142 Cr and profit ₹34 Cr as reported.

FY27-Q1. revenue ₹1,161 Cr and profit ₹20 Cr as reported.

Why-sources: our stock research file (31 May 2026) and the company’s own results for those quarters.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

RSWM Ltd's operating margin is 8.0% in the Jun 26 quarter, +2.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 2.3% to 14.0%. The current quarter sits inside that band.

Why this happened. The turnaround's core driver in FY26 was product mix optimization across five business verticals: deliberate exit from commodity segments (Chhata synthetic spinning closed), spindle relocation to PV dyed yarn at Khajigram (40,000 spindles shifted), and investment in printed knit capacity (120 tonnes/month printing facility under Rs 202 Cr capex). Value-added products are less than 20% of sales currently. The Rs 92-202 Cr knit capex (printing segment addition) targets 5-7% margin premium on printed versus non-printed fabric. Once the Q3 FY27 knit expansion completes, this driver gains a new leg — printed knit accessing 30-35% of knit fabric market (kidswear, womenswear, loungewear) where…

The latest quarter's operating margin is 8.0%, +2.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 2.3%–14.0%.

Why the margin moved: operating margin went +1.5 pp year on year while gross margin went +3.4 pp — the gain came mostly from the gross line: input costs and pricing.

FY26-Q4. revenue ₹1,142 Cr and profit ₹34 Cr as reported.

FY27-Q1. revenue ₹1,161 Cr and profit ₹20 Cr as reported.

Why-sources: our stock research file (31 May 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

RSWM Ltd earned ₹20.0 Cr of net profit in the Jun 26 quarter, +150.0% year on year. It is the 2nd consecutive quarter of growth. Full-year FY26 profit was ₹52.0 Cr. The 10-year compound rate is −7.4%. That is 1.7% of the quarter's revenue. The same quarter a year earlier earned ₹8.0 Cr.

Jun 26 profit was ₹20.0 Cr, +150.0% year on year — the 2nd consecutive quarter of growth. On the full year, FY26 printed ₹52.0 Cr (null), and the 10-year compound rate is −7.4%.

FY26-Q4. revenue ₹1,142 Cr and profit ₹34 Cr as reported.

FY27-Q1. revenue ₹1,161 Cr and profit ₹20 Cr as reported.

Why-sources: our stock research file (31 May 2026) and the company’s own results for those quarters.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 174% of RSWM Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹435 Cr of operating cash against ₹52.0 Cr of profit. After ₹171 Cr of capital spending, ₹264 Cr was left as free cash.

FY26: operating cash of ₹435 Cr against reported profit of ₹52.0 Cr, leaving free cash of ₹264 Cr after ₹171 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 174% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 174%: the cash cycle tightened 58 days between FY21 and FY26 — cash that used to wait in the cycle now reaches the bank sooner.

Router verdict: the bigger cash user is investment — capital spending ran 1.6× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

RSWM Ltd's cash conversion cycle runs 89 days in FY26, down from 147 days in FY21. Capital spending ran ₹764 Cr over the last 3 years. At FY26 sales of ₹4,554 Cr each day of that cycle holds about ₹12.5 Cr, so roughly ₹1,110 Cr sits inside the business at any moment.

FY26: debtors at 51 days, inventory at 81 days — roughly 2.7 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 89 days, tighter than FY21's 147.

The full loop: cash goes out to suppliers and production on day 0; stock waits 81 days to sell; customers pay about 51 days after that; and suppliers themselves are paid at 42 days — netting out to the 89-day cycle.

In money terms: at FY26 sales of ₹4,554 Cr, each day of the cycle holds about ₹12.5 Cr — so the 89-day loop keeps roughly ₹1,110 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹764 Cr over the last 3 fiscal years against ₹468 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹68.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.⚠ unverified

RSWM Ltd earns a ROCE of 6% in FY26. That is up from a trough of 0% in FY24. Return on invested capital clears the cost of that capital by −7.6 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 1.1% net margin on 1.26× asset turns.

FY26 ROCE is 6%, recovered from a FY24 trough of 0% — the full ladder below shows the fall and the climb, undoctored.

🚨 Why the return is what it is — the wiring (FY26): 1.1% net margin × 1.26× asset turns × 2.66× balance-sheet leverage ≈ 3.7% on equity. Margin does its share; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 4.4% − 12.0% = a −7.6 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Negative — growth at these returns destroys value until the returns recover.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.⚠ unverified

RSWM Ltd carries total debt of ₹1,688 Cr against shareholder equity of ₹1,361 Cr as of Mar 26, a debt-to-equity of 1.24. On the annual view that ratio went from 1.07 in FY22 to 1.24 in FY26. Read the returns elsewhere on this page with that leverage in mind.

Mar 26: total debt of ₹1,688 Cr against shareholder equity of ₹1,361 Cr — a debt-to-equity of 1.24. On the annual view, debt-to-equity went from 1.07 (FY22) to 1.24 (FY26). Read the returns on this page with that leverage in mind.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

No holder of RSWM Ltd moved a full percentage point over the last two years — the register is quiet. Domestic institutions moved +0.4 points over the same window, to 0.5%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Foreign institutions: −0.8 points over 8 quarters to 1.0%; Domestic institutions: +0.4 points over 8 quarters to 0.5%; Promoters: +0.0 points over 8 quarters to 55.7%.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

RSWM Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

RSWM Ltd trades at 13.6× P/E, mid-range by its own standards (60th percentile). Its long-run median P/E is 11.6×, measured across 9.9 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 13.6× is mid-range by its own standards (60th percentile), against a long-run median of 11.6× measured over 9.9 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

The price move, decomposed: over 5y, of the −4.4%/yr price move, ~+28.1%/yr came from earnings growth and ~−32.5 pp from the multiple (compressing); over 10y, of the −3.6%/yr price move, ~−4.5%/yr came from earnings growth and ~+0.9 pp from the multiple (roughly flat). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is unremarkable against its own past, so the story rests on the earnings line underneath it, not the multiple.

A quarterly PEG curve, which only the second data source carries, is not drawn on this page: its two data sources do not share enough overlapping reported history to be compared. A figure nobody could check is not used to price growth — the gap is a decision, not missing data.

Stage: No read Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

RSWM Ltd reads as no read on its fundamental arc. Under eight usable quarters on the growth trio — not enough history for an honest trajectory read. The read is built from 8 quarters across 2 curves, on partial evidence.

Why it matters: with too little history, an honest page says so instead of guessing a trajectory.

One or more growth curves carry a base-effect spike — a large year-on-year move off a near-zero or loss-making comparable quarter. Those spikes are capped before the classifier reads the trajectory, and shown pinned on the chart, so a single distorted quarter does not drive the stage call.

Return readings here are annual, not quarterly — read as level and direction only; they can confirm the growth curves but never drive the stage on their own.

Fewer than eight usable quarters on the growth curves — this page will not guess a trajectory from a stub of history.

4-Factor Sector Score

50.7/100 — rank 7 of 13 in Textiles - Spinning · 80% evidence confidence

RSWM Ltd scores 50.7 out of 100 against the 13 companies it is compared with in Textiles - Spinning, ranking 7. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 20.1 + 5.4 + 10.7 + 14.5 = 50.7. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What RSWM Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

🚨 Knit Expansion Project Timeline - Significant Delay Without Explanation · 7 May 2026. In the Aug 2025 call, management committed to completing the Rs. 92 crore knit expansion within nine months, placing completion at approximately May 2026. The May 2026 call reveals the project is still under execution and now targeted for Q3 FY27 (October to December 2026), a delay of approximately five to seven months on the original nine-month schedule. No explanation was provided for this slippage, which pushes meaningful revenue contribution from the expansion to late FY27 at the earliest, contradicting the earlier commitment.

Renewable Energy Investment Savings - Major Downward Revision · 7 May 2026. In the Nov 2025 call, management projected annualized cost savings of Rs. 30-40 crores from the renewable energy program and, critically, explicitly stated that those savings were the primary motivation for committing Rs. 60 crores to the Adani round-the-clock power investment. In the May 2026 call, when asked directly about the cost reduction the same Rs. 60 crore Adani investment would deliver, management projected only approximately Rs. 12 crores per year (Rs. 1 crore per month), a 60-70% reduction with no reconciliation or explanation provided, materially altering the stated return profile and payback justification for this capital commitment.

Knit Expansion Cost Blowout · 12 February 2026. Management previously capped the capital expenditure for the knit division expansion at ₹92 crores to reach a capacity of 900 metric tons. In the latest call, they stated the cost for this expansion is now ₹202 crores—more than double the prior guidance—while the target capacity remains exactly the same at 900 metric tons. Earlier call (Aug 2025): “the board has approved a total CAPEX of Rs 92 crores to modernize and enhance our knitting operations... This will result in a 20% increase in the knitting capacity from the existing 750 metric tons to 900 metric tons”. Later call (Feb 2026): “The knit fabric expansion that we discussed last time, involving capital expenditure of 202 crores, is progressing... Total knitting capacity post-expansion will increase by 20% from 750 metric tons to 900 metric tons.”

Debt Neutrality Strategy Reversal · 12 February 2026. In the August 2025 call, management explicitly committed to a net-zero debt addition strategy, stating that any new debt would be matched by repayments to prevent balance sheet burden. However, in the latest call, they announced funding the LNJ Green Tech project with approximately ₹300 crores of new debt, contradicting the previous strict deleveraging/neutral stance. Earlier call (Aug 2025): “year-over-year, there will be no additional burden on the balance sheet... So, we are not going with any additional debt. Our repayments will be equal to the additional debt we will be taking.” Later call (Feb 2026): “The project cost is 427 crores. Out of that, approximately 300 crores is likely to be funded through debt and the balance 127 crores will be funded through internal accruals or equity.”

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions