About Borana Weaves Limited

Business Overview

Borana Weaves Company, based in Surat, is engaged in the manufacturing of unbleached synthetic grey fabric and polyester textured yarn (PTY Yarn). The grey fabric is a key raw material used across various industries such as fashion, traditional textiles, technical textiles, home décor, and interior design, mainly for dyeing and printing applications. The PTY Yarn is produced by heating polyester oriented yarn (POY Yarn), which is also used in grey fabric production.

Key Business Details:

• Industry: Textile

• Sector: Weaving

• Activity: Manufacturing

• Products: Unbleached synthetic grey fabric, PTY Yarn

Manufacturing operations are driven by advanced textile technologies and pollution-light machinery sourced from both domestic and international suppliers. As of December 31, 2024, the company operates with 15 texturizing machines, 6 warping machines, 700 water jet looms, and 10 folding machines across three units.

The Indian textile market is undergoing a shift towards synthetic textiles, owing to their affordability, durability, and low maintenance. Polyester demand in India, currently at ~4 million tonnes, is expected to rise to 6.7 million tonnes by 2025. Rising brand consciousness and dynamic fashion trends are further fueling this growth. With the global man-made fiber market projected to grow by 3.7% by 2025, India is strategically positioned to tap into both domestic and export opportunities in the synthetic textile segment.

As of December 31, 2024, the Company had 666 on-roll employees. The Banker to the Company is HDFC Bank Limited.

Industry Analysis

Indian Textile and Synthetic Textile Industry Overview

India ranks among the world's top producers and exporters of readymade garments. The country’s domestic market for these garments has also seen significant growth, making India one of the fastest-growing and most lucrative apparel markets globally. The sector is a vital source of employment, with apparel manufacturing alone providing jobs to approximately 12.3 million people.

However, recent years have seen a slowdown in both domestic and export demand. Within India, economic uncertainty has led consumers to reduce discretionary spending, directly impacting apparel sales. Internationally, recessionary trends in key markets such as the United States and the European Union have dampened export demand.

Current Domestic Market Conditions

The current slowdown in the domestic market has affected manufacturers' order books, particularly for the upcoming festive season, where a 25–30% decline in orders is projected. This decline is largely due to:

• Persistent inflation,

• Volatile input costs (cotton, polyester yarn, and man-made fibers),

• Rising prices, which have reduced consumer demand.

Production Landscape

India's textile production remains extensive. In FY 2023, the country produced approximately:

• 493 million running meters of fabric (cotton woven and polyester/viscose blends),

• 121 thousand tons of knitted cotton fabric.

The sector contributes 2% to India’s GDP and accounts for 7% of industrial output. Despite holding a 4% share in global textile trade and contributing over 10% to India’s export basket (2021–22), the industry is currently facing a downturn. Key challenges include:

• Reduced consumer demand as spending shifts to essentials and electronics,

• Under-utilization in the spinning sector due to lower yarn imports and domestic demand.

Government Initiatives and Global Opportunities

In response, the Indian government has rolled out support schemes such as:

• Production Linked Incentive (PLI) scheme,

• PM MITRA (Mega Integrated Textile Region and Apparel) parks.

These aim to:

• Boost investments in man-made fibers (MMFs) and technical textiles,

• Reduce dependency on imports, especially from China, Vietnam, and Taiwan.

Additionally, instability in Bangladesh's garment sector (labor unrest, political issues, falling exports) is opening up opportunities for Indian exporters. Global brands are now increasingly looking to diversify their supply chains, and India stands to gain if it can ensure quality, compliance, and sustainability.

However, rising freight costs—up nearly 40% due to Red Sea disruptions—are adding to input cost pressures.

Growth Outlook for Indian Textile Industry

Despite current challenges, the long-term outlook remains positive:

• Rising disposable incomes and changing consumer lifestyles are expected to drive domestic demand.

• India’s emergence as a global textile manufacturing hub positions it well for export growth once global demand rebounds.

• Government initiatives like Make in India and the implementation of GST are supporting a conducive ecosystem for manufacturing and exports.

• Technological advancements such as automation and digitalization are helping improve productivity and quality.

• A growing skilled workforce gives India a competitive edge in global markets.

Forecasts:

• The Indian textile and apparel industry is expected to grow at a CAGR of 10% between 2019–20 and 2025–26, reaching USD 190 billion.

• The domestic apparel market, valued at USD 40 billion in 2020, is expected to grow to USD 135 billion by 2025.

• Cotton production is projected to rise to 7.2 million tonnes (approx. 43 million bales) by 2030, supporting long-term fabric output growth.

However, these optimistic projections are contingent on:

• Revival in domestic consumption,

• Stabilization of global economic conditions to spur export growth.

Synthetic Textile Industry in India

Synthetic textiles are man-made fabrics derived from chemical processes, using synthetic fibers like polyester, nylon, acrylic, and spandex. These fabrics are known for:

• Durability and resistance to wear,

• Quick-drying and moisture-wicking properties,

• Versatility across fashion, home furnishings, and industrial sectors.

Common Synthetic Fibers

• Polyester: Strong, stretch-resistant, used widely in garments, home décor, and industrial products.

• Nylon: High strength and elasticity, suitable for outerwear and upholstery.

• Acrylic: Lightweight and warm, often used as a wool substitute in knitwear.

• Spandex (Lycra): Extremely elastic, popular in activewear and swimwear.

• Rayon: Semi-synthetic, soft and breathable, used in apparel and home textiles.

Growth Drivers and Trends

• Increased demand for affordable, durable, and high-performance textiles.

• Growing popularity of activewear and athleisure.

• Industry focus on sustainability, including the use of recycled materials and eco-friendly production.

• Rise in fiber blending, combining synthetic and natural materials to improve sustainability and performance.

Environmental Concerns

Despite their advantages, synthetic fabrics have significant environmental drawbacks:

• Energy-intensive and petrochemical-based production,

• Non-biodegradability, leading to persistent waste,

• Microplastic shedding during washing, which pollutes water systems and harms marine ecosystems.

End-Use Applications

Synthetic fabrics are widely used in:

• Apparel: Especially in sportswear, outdoor wear, and casual clothing.

• Home Textiles: Curtains, upholstery, bed linens.

• Industrial Use: Automotive interiors, protective clothing, geotextiles.

Conclusion

India’s textile and synthetic textile industries are navigating short-term headwinds driven by global recessionary pressures and domestic demand slowdowns. However, with a strong foundation, proactive government support, emerging global opportunities, and a shift toward sustainability and innovation, the sector is poised for robust long-term growth

Business Strengths

1. Strategic Focus on Unbleached Synthetic Grey Fabric

Textile manufacturer based in Surat, Gujarat, specializing in unbleached synthetic grey fabric used across industries such as fashion, traditional and technical textiles, home décor, and interior design. Positioned to capitalize on rising demand for synthetic textiles.

2. Advanced Manufacturing Infrastructure

Equipped with water jet looms, offering superior weaving precision, uniform texture, and high-speed output. The integrated units operate efficiently with lower energy use, reduced yarn breakage, and minimal production waste, ensuring sustainability and scale.

3. Strong Financial Performance

Achieved a CAGR of 116.84% in revenue, growing from ₹4,233.40 lakhs in FY22 to ₹19,905.56 lakhs in FY24. Maintained healthy profit after tax margins of 13.85%, 11.85%, 12.04%, and 4.25% across recent financial periods.

4. Experienced Leadership Team

Led by Mangilal Ambalal Borana, with 24+ years of textile industry experience, along with Ankur Mangilal Borana and Rajkumar Mangilal Borana, each with over a decade of sector expertise, driving consistent operational and business growth

Business Strategies

1. Tapping Growth in Synthetic Fibre Demand

Rising preference for affordable, durable, and low-maintenance synthetic textiles is driving polyester demand in India from 4 million tonnes to 6.7 million tonnes by 2025. Positioned to benefit from this shift, with additional upside from global man-made fiber market growth of 3.7% by 2025.

2. Expanding Customer Base and Wallet Share

Strong industry positioning and customer relationships enable increased wallet share from existing clients while targeting a broader customer base. Urbanization growth—from 35% in 2023 to 40% by 2030—is expected to drive higher demand for synthetic, urban-friendly textiles.

3. Diversifying into Technical Textiles

Strategic use of water jet loom technology to enter the technical textiles segment, catering to automotive, medical, and industrial applications. Backed by export projections of USD 65 billion by FY26, with focus on man-made fibers and innovation-led sustainability

Business Risk Factors and Concerns

1. Regulatory Approvals for Proposed Unit 4

Failure to secure necessary approvals such as Fire NOC, power usage clearance, and pollution board consent for the upcoming Unit 4 may delay or disrupt operations and affect financial performance.

2. High Geographic Revenue Concentration

Over 98% of revenue is derived from Gujarat-based customers. The lack of long-term contracts and regional dependency exposes the business to economic, political, or environmental risks specific to the region.

3. Dependence on Promoter Group for Raw Material

A significant portion of POY Yarn is procured from Promoter Group entities. Termination or disruption of these arrangements may affect production continuity and financial health.

4. Product Line Dependency

Grey fabric accounts for 84.24% of revenue (as of Dec 31, 2024). Any reduction in sales volume, pricing pressure, or production disruption in this segment could materially impact revenues and profitability.

5. Supplier Dependency Without Long-Term Contracts

Raw material procurement from key suppliers occurs without formal long-term agreements. Any disruption in supply or market shortage of POY Yarn may negatively affect production and operational efficiency.

Borana Weaves faces operational, geographical, and supply-related risks that may impact its business continuity, production efficiency, and revenue generation. Key risks include dependency on a single product line, geographic concentration, supplier reliance, and regulatory clearances for expansion.