Sangam (India) Ltd

NAVIGATING SUCCESS:

A LEGACY OF GROWTH

Our four decades of experience have endowed us with valuable insights, empowering us to drive innovation and maintain high standards.

Dear Shareholders,

As we unveil this Annual Report,

I share our journey through the past year with great enthusiasm.

The theme guiding us—Diverse Threads. Unified Vision.-captures our commitment to integrating varied strategies and perspectives while maintaining a singular focus on excellence and innovation.

Over the past year, we have diligently pursued a strategy of diversification, aimed at fortifying our market presence and tapping into new opportunities. This year marks a significant milestone for us as we celebrate four decades of unparalleled achievement in the textile industry.

Economic Landscape

The global economy faced numerous hurdles in 202324, including the Russia-Ukraine conflict, tensions in the Middle East, the Red Sea crisis, persistent inflationary pressures, and tightening monetary policies. Also, the disruption in trade routes and increased costs of raw materials created a challenging environment for industries worldwide, including the textile sector.

Despite these global adversities, India recorded a GDP growth of 8.2% for the fiscal year 2023-24, buoyed by high per capita income, effective government schemes such as the Production Linked Incentive (PLI) scheme and the PM Mitra scheme, and robust private consumption.

Industry Overview

The textile industry, an integral part of the Indian economy, encountered its own set of challenges during 2023-24. Reduced demand for textiles, driven by decreased consumer confidence and lower yarn demand, presented hurdles for many players in the sector. The global market's fluctuations and varying consumer preferences added to the complexity, affecting both production and sales.

Despite this, emerging trends are reshaping the landscape, presenting opportunities for growth and innovation within the textile industry. One of the most noteworthy shifts is the industry's increasing focus on sustainability. There is a growing emphasis on ecofriendly practices, with both consumers and businesses prioritising sustainable textiles. From organic cotton to recycled fibres, the sector is committed to reducing its environmental footprint while upholding high-quality standards.

The rise of technical textiles marks another pivotal development. These advanced materials, designed for specialised applications, are making substantial impacts across various industries, including healthcare and automotive. This evolution reflects the industry's adaptability and its role in driving innovation.

The surge in e-commerce and digitalisation has also transformed the way textiles are marketed and consumed. Online platforms have become essential channels for reaching customers, offering new opportunities for engagement and growth.

Sangam's Strategic Positioning

At Sangam, we are strategically positioned to leverage emerging opportunities. Our focus on diversification, enhanced capabilities, and sustainable practices has been integral to our proactive alignment with industry trends. With four decades of experience, we have cultivated valuable insights that drive our innovation and uphold high standards.

Our substantial investment in cutting-edge technologies and market expansion directly addresses the growing demand for high-quality yarn and fabrics. Additionally, our commitment to sustainability ensures that our practices not only adhere to environmental standards but also actively contribute to a more sustainable future.

Financial Performance

For the fiscal year 2023-24, our total revenue from operations stood at ' 2,628 Crore, reflecting a slight decrease of 3.10% compared to ' 2,712 Crore in 202223. Similarly, our profit after tax (PAT) amounted to ' 41 Crore in 2023-24, down by 68.7% from ' 131 Crore in the previous year 2022-23. Despite these setbacks, we are focussed on strategic measures to enhance profitability and operational efficiency.

Our domestic sales contribution was 67%, while export sales contributed 33% to our revenue. The revenue distribution among our product segments was as follows: Yarn contributed 47%, PV Fabric 22%, Denim Fabric 28%, and Garments 3%.

Capital Expenditure and Growth Initiatives

We have undertaken substantial capital expenditure to drive growth and expand our capabilities. For our Yarn division, we have allocated a capital outlay of ' 344 Crore, which will enhance our capacity from 1,03,140 MTPA to 1,12,440 MTPA. This expansion is expected to be completed by the start of 2025-26, positioning us to meet future demand.

In the Synthetic Fabric division, we have invested ' 160 Crore to increase our weaving capacity from 48 MMPA to 65 MMPA. This expansion is anticipated to be finalised by the end of 2024-25, further strengthening our market position.

Sustainability Commitment

Sustainability remains a core focus of our operations, and we are dedicated to minimising our environmental impact through various proactive measures. Our commitment to renewable energy is exemplified by our operation of three solar power plants, which generate a total of 16 MW of power, along with a 5 MW wind energy facility. These initiatives significantly contribute to our renewable energy goals and support our broader sustainability objectives.

In addition to our renewable energy efforts, we place a strong emphasis on water and waste management. We effectively manage three effluent treatment plants and four sewage treatment plants, which are crucial for recycling water and managing waste.

Our recycling and resource efficiency practices are also integral to our sustainability strategy. Currently, we recycle 30,000 MT of fibre annually from 38,400 MT of plastic waste. Additionally, we process 12,500 MT of cotton and other waste each year. These efforts are part of our ongoing commitment to reducing our environmental footprint and promoting resource efficiency.

Beyond our environmental initiatives, we are also dedicated to community empowerment and well-being. We have established educational institutes and a NABH-certified hospital, reinforcing our commitment to enhancing the quality of life for the communities we serve.

Way Forward

Looking ahead, our vision is to move up the value chain and achieve a revenue target of ' 4,000 Crore by 2025-26, with EBITDA margins reaching 12.5%. We anticipate that our sales contributions in 2025-26 will be as follows: Garments - 6%, Yarn - 33%, and Fabric - 61%.

Our strategy includes a strong focus on value-added products, continued capital expenditure to drive growth, and expanding our market presence both domestically and internationally. The recent commissioning of new capacities is expected to benefit from the anticipated uptick in demand, with cotton prices stabilising and trends showing positive signs.

As we navigate these exciting times, we remain confident in our ability to leverage our strengths and drive future growth. Our experience, strategic investments, and commitment to innovation position us well to contribute significantly to the revitalisation of the textile industry.

Note of Thanks

As we reflect on the year 2023-24, I want to extend my heartfelt gratitude to all those who have contributed to our journey. Despite the challenging global landscape, our collective efforts have ensured that we continue to advance and thrive.

Further, I would like to thank all dedicated employees, valued suppliers and partners, loyal customers, and stakeholders for their strong support and contributions. Together, we look forward to building on our successes and navigating the future with resilience and optimism.