Technical textiles player Shri Techtex to Focus on US markets, aims to double its topline by FY26

• Focus on US markets led by end-user industries such as construction, geotextiles, agriculture and healthcare

• By October 2023 to commence production of new products – further diversifying the growth potential and improving margins

• Ahmedabad-headquartered SME filed its DRHP for IPO earlier this year with NSE Emerge

National, July 05, 2023 (GNI): Shri Techtex Limited, among the fast-growing manufacturer and exporters of technical textiles, is eyeing to cross Rs.100 crore mark in revenues by FY2026, riding on a direct foray into the US market, expansion in product portfolio and improved capacities. The Ahmedabad-headquartered company filed its DRHP earlier this year with NSE Emerge for its IPO and aims to use the issue proceeds to fuel its growth and expand margins.

As per the DRHP document, Shritex Tech’s operational revenues were Rs. 51.17 crore for FY22 and Rs. 35.21 crore for 5MFY23. The EBIDTA stood at 12.26 crore and 6.93 crore for FY22 and 5MFY23, respectively. PAT stood at Rs. 8.27 crore for FY22 and Rs. 6.07 crore for 5MFY23. Exports sales accounted for 49% in 5MFY23 and 90% in FY22, with the US in both cases accounting for 90% through distributors. The company plans to make a retail foray in the US markets with products catering to the construction and infrastructure sector.

Commenting on the company’s growth strategy, Mr. Hanskumar Agarwal, Executive Director, Shri Techtex Limited, said, “We have built a robust foundation in terms of products, capacities, clientele and geographical reach in the first decade of our operations. We are now unveiling the next chapter of our journey – eyeing to expand the scale, product portfolio and margins, thereby creating sustained value for our stakeholders. We have invested in the growth assets and transiting to a public company – which will open a new world of ambitions for the company. Rs. 100 crore mark is a milestone which we are expecting to breach within the next two years. This will put us among the next-tier industry leaders in a fast-growing globally relevant product segment.”

The company’s objects to the issue as per the DRHP filed are towards the construction of the factory shed (Rs. 3.71 crore), commissioning of a solar plant (Rs. 4.89 crore), purchase of machinery (Rs. 8.34 crore), meeting Working Capital Requirement (Rs. 13.30 crore) and General Corporate Purpose including Issue Expenses. The company’s business is highly energy intensive and demands high working capital. Post the issue; the company will be able to expand its margins through value-added products, lower energy outgo and retiring high-cost debt leading to ease of interest burden.

The company manufactures PP non-woven fabric in various sizes and densities up to 4.5 meters in size and 15 GSM to 800 GSM. Non-woven fabric is more ecological for certain applications, especially in fields and industries where disposable or single-use products are important, such as organic farming, hospitals, health care, nursing homes, home furnishing, vehicle upholstery seat fabrication, Mattress & furniture covering, an ecological packaging, industrial and consumer goods. Its manufacturing facility is located at Simaj of Dholka Taluka in the Ahmedabad District of Gujarat and offers proximity to near about transport hubs. The manufacturing facility is spread across 41,548 sq. meters and installed with a 3600 MT PP non-woven fabric capacity per annum.

The company is set to add new products to improve its product portfolio. The company is in the process of importing specialised machinery for manufacturing and expects machinery to be ready for commercial production by October 2023.ends GNI