Value Added Product Mix Shift
Expected: ImmediateHIGH confidence
What: Gross Margin: 39.2%
Impact: 310 bps YoY expansion
“The improvement was driven by our favorable product mix... Gross margin strengthened to 39.2% in Q3 FY 2026.”
RSWM Ltd: Why Is It Outperforming Nifty 500?
ActiveAverage5w Streak
In , RSWM Ltd (Textiles - Spinning) is outperforming Nifty 500 with +5.0% relative strength. Fundamentals: Average. On a 5-week streak.
RSWM Ltd Key Facts
- PE Ratio
- 27.8x
- Market Cap
- ₹775 Cr
- PAT Growth YoY
- +126%
- Revenue Growth YoY
- -9%
- OPM
- 6.3%
- RS vs Nifty 500
- +5.0%
PE: Near TroughRiding Wave
What's Happening
💪Debt reduced 11% YoY — balance sheet strengthening
💰Trading 28% below estimated fair value
Earnings Acceleration Triggers
1. Value Added Product Mix Shift
ImmediateHIGH
2. Interest Cost Reduction Deleveraging
OngoingMEDIUM
3. Regulatory Approval Or License Win
Q1/Q2 Next FiscalHIGH
Key Risks
1. Ongoing tariff tensions and policy uncertainties impacting demand in knit, denim
HIGH2. Onetime exceptional expense of ₹10 Cr related to labor code linked service costs
MEDIUM3. Uncertainty in Bangladesh market regarding yarn imports and potential additional
MEDIUMSector-Specific Signals
Gross Margin %39.2%+310 bps
Capacity Utilization - Yarn90s
Knit Capacity (Current)750 MT0
Renewable Energy Mix70%
Key Numbers
PAT Growth YoY
+126%
Inflection Up
Revenue YoY
-9%
Inflection Down
Operating Margin
6.3%
+202 bps YoY
PE Ratio
27.8
Current Price
₹165
Fundamental Score
46/100
Average
3Y PAT CAGR
-50%
Market Cap
786 Cr
Valuation
Undervalued12-Week Performance
Weekly presence in the outperformers list. Green = beating Nifty 500 by 10%+ that week.
12 weeks agoThis week
Why Are RSWM Ltd's Earnings Accelerating?
Based on Q3 FY26 earnings • Updated Apr 18, 2026
Interest Cost Reduction Deleveraging
Expected: OngoingMEDIUM confidence
What: Finance Cost: ₹4 Cr reduction
Impact: ₹7 Cr savings in 9M
“Finance costs declined by approximately ₹4 Cr year-on-year, driven by improved liquidity and lower borrowing cost.”
Regulatory Approval Or License Win
Expected: Q1/Q2 Next FiscalHIGH confidence
What: Tariff Variance: 18%
“India and United States announced an interim trade framework aimed to reducing the tariff variance to 18% from the previously increased 50%.”
Operating Leverage Inflection
Expected: FY 2027MEDIUM confidence
What: Capacity Utilization: High 90s in yarn
“Next year, we will try to harness full capacity utilization for knit, mélange.”
New Product Or Brand Launch
Expected: FY 2027 H1MEDIUM confidence
What: Knit Capacity: 120 tonnes printing
“A key highlight of this expansion is the introduction of printed knit product lines, enabling RSWM to enter a fashion-intensive segment.”
EBITDA Margin of 7.4%
HIGH confidence
What: EBITDA Margin of 7.4%
“EBITDA margins rose to 7.4% in Q3 FY26, compared with 6.8% in Q2 FY26 and 4.8% in Q3 FY25.”
What Are the Key Risks for RSWM Ltd?
Earnings deceleration risks from management commentary
Ongoing tariff tensions and policy uncertainties impacting demand in knit, denim
HIGHTrigger: U.S. tariffs and geopolitical pressures have led to lower demand and volume moderation.
Monitor: geopolitical
Onetime exceptional expense of ₹10 Cr related to labor code linked service costs
MEDIUMTrigger: New labor code requirements necessitated a provision for service costs.
Monitor: labor
Uncertainty in Bangladesh market regarding yarn imports and potential additional
MEDIUMTrigger: Bangladesh spinners are pressuring their government to restrict Indian yarn imports.
Monitor: regulatory
Raw material costs remained stable during the quarter, but volatility remains a
LOWTrigger: Disciplined sourcing practices and improved inventory management mitigated impact.
Monitor: commodity
What Is RSWM Ltd's Management Saying?
Key quotes from recent conference calls
“Next year, it will be full... the savings will be to the tune of ₹30 crores to ₹40 crores at this. [Previous Renewable Energy Savings guidance]”
“With this investment, our knit capacity will increase from 700 tons to 900 tons per month, along with the new printing facility. [Previous Knit Capacity Expansion guidance]”
“It will take two to three years to harness full potential of ₹500 Cr as revenue from this project. [Initiative: LNJ GreenPET Project]”
“Per unit savings would be varying from ₹1 to ₹1.5 per unit and thereby impacting our overall consumption per kg. [Initiative: Renewable Energy Integration]”
What Did RSWM Ltd Report This Quarter?
Headline numbers from the latest earnings call
Revenue
₹1,093 Cr
QoQ -4.9%
Why: Revenues were impacted by volume moderation across selected segments despite a stable performance for the nine-month period.
Revenue showed sequential decline from ₹1,150 Cr in Q2 to ₹1,093 Cr in Q3.
EBITDA
₹82 Cr
YoY +41.7%Margin 7.4%
Why: Improvement was driven by favorable product mix, stable raw material costs, and improved operating leverage through optimum capacity utilization.
EBITDA margins expanded from 6.8% in Q2 to 7.4% in Q3 despite lower revenue.
PAT
₹4 Cr
QoQ -36.5%
Why: Profitability was impacted by a onetime exceptional expense of approximately ₹10 Cr related to labor code linked service costs.
Excluding the exceptional item, underlying profitability would have been significantly higher than the reported ₹4 Cr.
Other Highlights
• Gross margin strengthened to 39.2% in Q3 FY26, up 310 bps YoY.
• Finance costs declined by ₹4 Cr YoY due to improved liquidity.
• 9M FY26 PAT reached ₹17 Cr, a turnaround from a loss last year.
What Sector Metrics Matter for RSWM Ltd?
Sub-sector-specific signals from the latest concall — each with management's stated reason for the change
Gross Margin %
39.2%
YoY +310 bpsQoQ +78 bps
Why: Driven by favorable product mix and stable raw material costs.
Capacity Utilization - Yarn
90s
Why: Yarn business maintains high utilization levels.
Knit Capacity (Current)
750 MT
YoY 0QoQ 0
Why: Expansion to 900 MT is currently in progress.
Renewable Energy Mix
70%
Why: Strategic shift to solar and wind power to reduce costs.
Finance Cost Reduction (YoY)
₹4 Cr
Why: Improved liquidity and lower borrowing costs.
ROCE
5.1%
YoY +180 bps
Why: Directly linked to improved profit before interest and tax.
Working Capital Cost
9%
Why: Use of vendor discounting platforms for interest arbitrage.
Exceptional Labor Provision
₹10 Cr
Why: Provision for labor code linked service costs.
What Is RSWM Ltd's Management Guidance?
Forward-looking targets from management for FY 2026-2027
OPM Guidance
10%
Capex Plan
₹92 Cr
Revenue Outlook
₹5,000 Cr
Margin Outlook
Targeting double-digit EBITDA margin
Capex Plan
₹92 Cr
Knitted fabric expansion and modernization
Volume
Knit capacity to increase by 20%
Management Tone: BULLISH
Guidance Changes
LOWERED
Knit Expansion Timeline: FY 2025-26 → FY 2027 H1
How Fast Is RSWM Ltd Growing?
Revenue, profit and margin growth rates
| Metric | YoY | 3Y CAGR | Trend |
|---|---|---|---|
| Revenue | -9% | +8% | Inflection Down |
| PAT (Net Profit) | +126% | -50% | Inflection Up |
| OPM | 6.3% | +202 bps | Volatile |
The above analysis is parsed from publicly available earnings call transcripts. This is educational research only — not investment advice. Last updated Apr 18, 2026.
Other Top Textiles - Spinning Stocks Beating Nifty 500
Frequently Asked Questions: RSWM Ltd
Based on publicly available financial data. This is educational research, not investment advice.
What were RSWM Ltd's latest quarterly results?
RSWM Ltd's latest quarterly results (Dec 2025) show
- PAT Growth YoY: +125.8% (turning around (inflection up))
- Revenue Growth YoY: -8.8%
- Operating Margin: 6.3% (volatile)
Is RSWM Ltd's profit growing or declining?
RSWM Ltd's profit is growing with an turning around (inflection up) trend.
- PAT Growth YoY: +125.8% (latest quarter)
- PAT Growth QoQ: -68.0% (sequential)
- 3-Year PAT CAGR: -50.0%
- Trend: Turning around (inflection up) — consistent growth pattern
What is RSWM Ltd's revenue growth trend?
RSWM Ltd's revenue growth trend is inflecting downward.
- Revenue Growth YoY: -8.8%
- Revenue Growth QoQ: -5.2% (sequential)
- 3-Year Revenue CAGR: +8.1%
How is RSWM Ltd's operating margin trending?
RSWM Ltd's operating margin is volatile.
- Current OPM: 6.3%
- OPM Change YoY: +2.0% basis points
- OPM Change QoQ: -0.0% basis points
What is RSWM Ltd's 3-year profit and revenue CAGR?
RSWM Ltd's long-term compounding rates
- 3-Year Profit CAGR: -50.0%
- 3-Year Revenue CAGR: +8.1%
Is RSWM Ltd's growth accelerating or decelerating?
RSWM Ltd's earnings growth is turning around (inflection up) with weakening on a sequential basis.
- YoY Acceleration: 0.0% bps
- Sequential Acceleration: -38.8% bps
What is RSWM Ltd's trailing twelve month (TTM) performance?
RSWM Ltd's trailing twelve month (TTM) performance
- TTM PAT: ₹20 Cr
- TTM PAT Growth: +100.0% YoY
- TTM Revenue: ₹5,000 Cr
- TTM Revenue Growth: -1.5% YoY
- TTM Operating Margin: 6.1%
Is RSWM Ltd overvalued or undervalued?
RSWM Ltd appears undervalued based on our fair value analysis.
- Valuation Signal: Undervalued
- Current PE: 27.8x
- Price-to-Book: 0.6x
What is RSWM Ltd's current PE ratio?
RSWM Ltd's current PE ratio is 27.8x.
- Current PE: 27.8x
- Market Cap: 775 Cr
How does RSWM Ltd's valuation compare to its history?
RSWM Ltd's current PE is 27.8x.
- Current PE: 27.8x
- Valuation Assessment: Undervalued
What is RSWM Ltd's price-to-book ratio?
RSWM Ltd's price-to-book ratio is 0.6x.
- Price-to-Book (P/B): 0.6x
- Book Value per Share: ₹279
- Current Price: ₹165
Is RSWM Ltd a fundamentally strong company?
RSWM Ltd is rated Average with a fundamental score of 46/100. This score is calculated from objective financial metrics
- Revenue Growth YoY: -8.8% (10% weight)
- PAT Growth YoY: +125.8% (10% weight)
- PAT Growth QoQ: -68.0% (10% weight)
- Margins stable (10% weight)
Is RSWM Ltd debt free?
RSWM Ltd has a debt-to-equity ratio of N/A.
- Total Debt: ₹2,000 Cr
What is RSWM Ltd's return on equity (ROE) and ROCE?
RSWM Ltd's return ratios over recent years
- FY2023: ROCE 8.0%
- FY2024: ROCE 0.0%
- FY2025: ROCE 3.0%
Is RSWM Ltd's cash flow positive?
RSWM Ltd's operating cash flow is positive (FY2025).
- Cash from Operations (CFO): ₹426 Cr
- Free Cash Flow (FCF): ₹313 Cr
What is RSWM Ltd's dividend yield?
RSWM Ltd currently does not pay a significant dividend (yield 0.00%).
- Dividend Yield: 0.00%
- Current Price: ₹165
Who holds RSWM Ltd shares — promoters, FII, DII?
RSWM Ltd's shareholding pattern (Mar 2026)
- Promoters: 55.7%
- FII (Foreign): 1.2%
- DII (Domestic): 0.4%
- Public: 42.5%
Is promoter holding increasing or decreasing in RSWM Ltd?
RSWM Ltd's promoter holding has remained stable recently.
- Current Promoter Holding: 55.7% (Mar 2026)
- Previous Quarter: 55.7% (Dec 2025)
- Change: 0.00% (stable)
How long has RSWM Ltd been outperforming Nifty 500?
RSWM Ltd has been outperforming Nifty 500 for 5 consecutive weeks, indicating building momentum.
Is RSWM Ltd a new momentum entry or an established outperformer?
RSWM Ltd is an established outperformer with 5 weeks of consecutive Nifty 500 outperformance.
What are the growth catalysts for RSWM Ltd?
RSWM Ltd has 6 key growth catalysts identified from recent earnings analysis
- Value Added Product Mix Shift — Shift from grey to dyed PV yarn and introduction of printed knit products.
- Interest Cost Reduction Deleveraging — Improved liquidity, lower borrowing costs, and reduction in repo rates.
- Regulatory Approval Or License Win — Interim trade framework with US and FTA with EU/UK will level the playing field.
- Operating Leverage Inflection — Harnessing full capacity utilization for knit and mélange as demand recovers.
What are the key risks in RSWM Ltd?
RSWM Ltd has 4 key risks worth monitoring
- [HIGH] Ongoing tariff tensions and policy uncertainties impacting demand in knit, denim — U.S. tariffs and geopolitical pressures have led to lower demand and volume moderation.
- [MEDIUM] Onetime exceptional expense of ₹10 Cr related to labor code linked service costs — New labor code requirements necessitated a provision for service costs.
- [MEDIUM] Uncertainty in Bangladesh market regarding yarn imports and potential additional — Bangladesh spinners are pressuring their government to restrict Indian yarn imports.
- [LOW] Raw material costs remained stable during the quarter, but volatility remains a — Disciplined sourcing practices and improved inventory management mitigated impact.
What did RSWM Ltd's management say in the latest earnings call?
In Q3 FY26, RSWM Ltd's management highlighted
- "Next year, it will be full... the savings will be to the tune of ₹30 crores to ₹40 crores at this. [Previous Renewable Energy Savings guidance]"
- "With this investment, our knit capacity will increase from 700 tons to 900 tons per month, along with the new printing facility. [Previous Knit Capac..."
- "It will take two to three years to harness full potential of ₹500 Cr as revenue from this project. [Initiative: LNJ GreenPET Project]"
What is RSWM Ltd's management guidance for growth?
RSWM Ltd's management has provided the following forward guidance for FY 2026-2027
- Revenue outlook: ₹5,000 Cr
- OPM guidance: 10%
- Capex plan: ₹92 Cr for Knitted fabric expansion and modernization
- Management tone: bullish
- Milestone: [LOWERED] Knit Expansion Timeline: FY 2025-26 → FY 2027 H1
What sector-specific metrics matter most for RSWM Ltd?
RSWM Ltd's most important sub-sector-specific KPIs from the latest concall
- Gross Margin %: 39.2% (YoY +310 bps) (QoQ +78 bps) — Driven by favorable product mix and stable raw material costs.
- Capacity Utilization - Yarn: 90s — Yarn business maintains high utilization levels.
- Knit Capacity (Current): 750 MT (YoY 0) (QoQ 0) — Expansion to 900 MT is currently in progress.
- Renewable Energy Mix: 70% — Strategic shift to solar and wind power to reduce costs.
- Finance Cost Reduction (YoY): ₹4 Cr — Improved liquidity and lower borrowing costs.
- ROCE: 5.1% (YoY +180 bps) — Directly linked to improved profit before interest and tax.
Is RSWM Ltd worth studying for long term investment?
Based on quantitative research signals, here is why RSWM Ltd may be worth studying
- Earnings growing at +125.8% YoY
- Valuation: appears undervalued
- Cash flow is positive — CFO ₹426 Cr
What is the investment thesis for RSWM Ltd?
RSWM Ltd investment thesis summary:
Research Signals (Bull Case)
- Appears undervalued
- Growth catalyst: Value Added Product Mix Shift
Risk Factors (Bear Case)
- Key risk: Ongoing tariff tensions and policy uncertainties impacting demand in knit, denim
What is the future outlook for RSWM Ltd?
RSWM Ltd's forward outlook based on current data signals
- Earnings Trend: turning around (inflection up)
- Revenue Trend: inflecting downward
- Margin Trend: volatile
- Valuation: Undervalued
- Key Catalyst: Value Added Product Mix Shift
- Key Risk: Ongoing tariff tensions and policy uncertainties impacting demand in knit, denim
The above FAQs are generated from publicly available earnings data and conference call transcripts. This is educational research only. Sector Alpha is not SEBI registered and does not provide investment advice.