Sanathan Textiles Faces Profitability Challenges Amid Record High Sales and Rising Costs

Sanathan Textiles, a small-cap player in the Garments & Apparels industry, has recently undergone a financial trend adjustment reflecting significant challenges in its performance metrics for the quarter ending September 2025. The company's net sales reached a record high of Rs 817.99 crore, indicating strong revenue generation capabilities. However, this positive aspect is overshadowed by a notable decline in profitability, with the profit after tax (PAT) falling to Rs 20.12 crore, a decrease of 46.6% compared to the previous four-quarter average.
The company's operating profit to interest ratio has also dropped to a concerning 3.42 times, while interest expenses surged to Rs 18.48 crore, marking the highest level recorded. Additionally, the profit before tax less other income (PBT less OI) stood at Rs 26.23 crore, the lowest in recent quarters, and earnings per share (EPS) fell to Rs 2.38.

In terms of market performance, Sanathan Textiles has faced challenges compared to the Sensex, with a 1-week return of -3.41% and a 1-month return of -6.7%. However, the year-to-date return of 27.23% suggests some resilience in the longer term. Overall, the company is navigating a complex landscape, balancing strong sales against declining profitability and rising costs.