Summary
Himatsingka Seide Limited - Q3 FY26 Earnings Call Summary Thursday, February 12, 2026 4:00 PM
Event Participants
Executives 5 Bankesh Dhingra, Bimal Agarwal, Harikrishnan Balasubramanian, Sankaranarayanan M, Shrikant Himatsingka
Analysts 4 Aditya Singh, Bhavin Chheda, Prerna Jhunjhunwala, Yash Naik
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹637.26 crores | -11.7% YoY; decline driven by the overhang of high U.S. tariffs during the quarter. |
| Other Income | ₹25.00 crores | Primarily driven by forex gains due to INR depreciation against the USD. |
| Net Debt | ₹2,480.00 crores | Absolute debt level as of December 31, 2025. |
| Spinning Utilization | 99% | Remained stable at near-full capacity. |
| Sheeting/Terry Towel Utilization | ~75-85% (Est.) | Declined by 100-200 bps QoQ mirroring the revenue impact from tariff issues. |
| India Revenue Target | ₹400-500 crores | Target for the next 18-24 months, scaling to ₹800-1,000 crores in 4-5 years. |
Geographic & Segment Commentary
- United States: Revenue impacted by the 50% tariff regime during Q3; management expects normalization in FY27 following the reduction of tariffs to 18%. Exposure is targeted to fall below 50% of total revenue within 18-24 months as the company diversifies.
- India Domestic: Currently served by three brands (Himeya, Liv, Atmosphere) across MBO, LFS, e-commerce, and quick commerce channels. The segment is showing consistent YoY growth and is a high-priority strategic pillar for future revenue mix.
- EMEA (Europe, Middle East, Africa): Expected to be a major beneficiary of the recently announced EU FTA and the upcoming UK FTA. Management is aggressively pitching to clients in these regions to provide an alternative to duty-free competitors like Pakistan.
Company-Specific & Strategic Commentary
- Himatsingka 2.0 & Diversification: Moving beyond Home Textiles to include fabric solutions, apparel solutions, and yarn solutions to reduce concentration risk. This expansion will leverage existing global-scale infrastructure with minimal incremental capex.
- Cellulosic Focus: Strategic shift to leverage expertise in non-manmade fibers (cotton, viscose, linen) across new product verticals. The goal is to utilize flexible shop floors to play in larger global market pools where trade volumes exceed home textiles.
- Operational Efficiency: Future capex for new product lines will be contained within annual maintenance capex buckets. The company is focusing on enhancing asset utilization through these new verticals rather than traditional sheeting growth, which is viewed as more “muted.”
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Margins | Normalization in FY27 | Recovery contingent on successful bilateral price renegotiations with U.S. clients post-tariff reduction. |
| Revenue Mix | <50% U.S. Concentration | Target timeframe of 18-24 months through aggressive growth in India and EMEA. |
| Capex | Within Maintenance Levels | Strategy to drive new verticals through existing flexible infrastructure rather than major new builds. |
Risks & Constraints
| Risk | Context |
|---|---|
| Tariff Transition | While U.S. tariffs dropped from 50% to 18%, management warned that Q4 FY26 will see no immediate relief due to the timing of executive orders and the need for bilateral negotiations. |
| Market Mutes | Management noted that global supply math in the sheeting category may lead to muted growth rates, necessitating the pivot to new product verticals. |
| Concentration Risk | Historical heavy reliance on the U.S. market and two specific product categories (Bedding/Bath) has created volatility, which the “Himatsingka 2.0” strategy seeks to mitigate. |
Q&A Highlights
Tariff Reduction & Margin Recovery
- Question: Can we expect margins to return to the 20% range in the next financial year? (Yash Naik)
- Answer: Margins should normalize progressively as we move into FY27. This requires concluding negotiations with clients to recoup price supports provided during the 50% tariff regime. (Shrikant Himatsingka)
Product Diversification (Himatsingka 2.0)
- Question: How will you leverage cellulosic capabilities for new verticals? (Prerna Jhunjhunwala)
- Answer: We are introducing fabric, apparel, and yarn solutions using existing infrastructure. Home textiles can be restrictive; we want multiple engines for growth to increase utilization and tap larger global trade pools. (Shrikant Himatsingka)
Raw Material Sourcing
- Question: Are you shifting sourcing away from U.S. cotton due to costs? (Aditya Singh)
- Answer: U.S. cotton is generally more expensive than Indian cotton. While the tariff impact on U.S. cotton products was lower, our mix depends on client preference. Our new verticals will likely favor Indian raw materials. (Shrikant Himatsingka)
India Strategy
- Question: What is the store expansion plan for the domestic market? (Shashikant)
- Answer: We are avoiding a COCO (Company Owned Company Operated) model due to the nature of home textiles. Focus remains on an asset-light strategy via MBOs, large format stores, e-commerce, and franchise experience centers. (Shrikant Himatsingka)
Key Takeaway
Himatsingka Seide reported a transitionary Q3 FY26, with revenue declining 11.7% YoY to ₹637.26 crores due to the overhang of high U.S. tariffs. Despite these headwinds, the company maintained 99% utilization in its spinning division and is preparing for “Himatsingka 2.0.” This strategic pivot involves diversifying beyond home textiles into apparel, fabric, and yarn solutions to leverage existing flexible infrastructure without significant new capex. Management targets reducing U.S. revenue concentration to under 50% within 24 months, bolstered by the India domestic market (target ₹400-500 crores) and the newly signed EU FTA. While Q4 FY26 remains a period of negotiation, FY27 is positioned for margin normalization as the U.S. tariff regime eases to 18% and new product verticals begin contributing. The company remains focused on deleveraging from its current ₹2,480 crore net debt position while scaling non-U.S. revenue streams.
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