Sutlej Textiles Industries Ltd (STIL) reported subdued numbers for Q4FY18, below our estimates on all parameters. While net revenue grew marginally by 1.1% YoY, PAT de-grew sharply by 68.8%. Impacted by higher input cost and operating expenses, the EBITDA margins fell by 158bps YoY to 7.7%.

Sutlej Textiles Industries Ltd (STIL) reported subdued numbers for Q3FY18, below our estimates on all parameters. While net revenue grew by 10% YoY, PAT de-grew sharply by 40.9%. Impacted by higher input cost and operating expenses, the EBITDA margins fell by 243bps YoY to 9.5%.

Sutlej Textiles Industries Ltd (STIL) reported subdued numbers for Q2FY18. While net revenue grew by 7.9% YoY, adjusted PAT declined by 37.9%, below our estimates. Led by higher operating expenses, the EBITDA margins contracted 271bps YoY to 12.3%.

Sutlej Textiles Industries Ltd (STIL) reported mix set of numbers for Q4FY17. Net revenue grew by 8.9% YoY (above estimates), while PAT de-growth of 38.4% was in line. However, a sharp contraction of 320bps YoY in EBITDA margins was disappointing.

Buy Sutlej Textiles & Industries Ltd CMP and Add on Dips to band Rs. 540-570 for the Sequential Targets of Rs. 720-780

Exports of Cotton melange accounts for 25% of revenue: Sutlej started productionofthevalueaddedcottonmelangesegmentfromNovember2014, whichnowcontributesalmost25%ofitsrevenues.Premiumpricinginmelange,...

Sutlej textiles is going to expand its spindles capacity from 293,736 (FY15) to412,392 by the end of FY17E. This also includes recent acquisition of Birla Textile Mills with capacity of 83,376 spindles. We believe that the capacity expansion will help to increase the revenues by 16% CAGR till FY17E.