Himatsingka Seide (NSE:HIMATSEIDE)

CMP: ₹150

Disclosure: Invested. Not a recommendation.

About the Company

Himatsingka is a vertically integrated global textile major that designs, develops, manufactures, and distributes an extensive suite of textile products across the bedding, bath, drapery, and upholstery segments. This vertical integration enables the company to offer rapid response times and swiftly introduce new products to the market.

The company operates four manufacturing facilities located across two campuses in Karnataka, delivering some of the largest installed capacities globally. For example, its cotton spinning plant, recognised as the largest under one roof, houses 2,11,584 spindles while its sheeting plant for bedding products boasts an installed capacity of 61 MMPA. In addition, its Terry towel plant for bath products operates at a capacity of 25,000 TPA. Himatsingka also stands out as a leader in the global cotton track-and-trace arena by controlling a highly secure closed-loop cotton supply. This capability ensures complete traceability for a wide range of cotton products and guarantees that the cotton is not blended.

Brief of Operations

Himatsingka manufactures an array of products including bedsheets, comforters, quilts, pillows, blankets, and various towel types (bath, hand, beach, and kitchen). The product portfolio also extends to bathmats, bathrobes, mitts, wraps, canisters, tissue boxes, soap pumps, as well as curtains and drapes.

Historically, the company primarily operated within the bedding space and maintained a modest drapery and upholstery business. However, in FY20, Himatsingka commissioned a Terry towel unit to enter the bath segment, thereby strengthening its position in the global home textile arena with a comprehensive suite of solutions.

Products are sold through diverse retail channels including big box, department, specialty, and e-commerce stores via both licensed and owned brands as well as private labels, spanning more than 32 countries. Prestigious customers such as Calvin Klein, Tommy Hilfiger, and Disney are part of its clientele. Although the company has traditionally managed the entire lifecycle of branded products (design, development, sales and distribution, with brands receiving a royalty), it is now gradually shifting its focus toward private label opportunities. This realignment is expected to have minimal impact on profitability and margins while still retaining key brands that offer global visibility.

Geographically, the USA remains its core market, but recent years have seen expansion into the EU, UK, Middle East, Far East, and India. Notably, the Indian business which was a sub-₹25cr operation in FY23 is projected to hit ₹100cr in FY25, with expectations of growing to roughly ₹300–400cr by FY27 and exceeding ₹1000cr by FY30.

Financial Performance - Historical Overview

A review of historical financial statements reveals that revenues have been relatively flat over the years. The company enjoyed its most robust operating profitability between FY17 and FY19, during which revenues increased from ₹1900cr to ₹2600cr and operating margins were consistently healthy at 18–21%. Although revenues peaked at ₹3200cr in FY22, subsequent years experienced a decline, accompanied by margin pressures due to rising raw material (cotton) and energy costs. Notably, FY24 witnessed operating margins climbing to 21%, its highest levels ever.

Himatsingka completed its major capex cycle prior to FY20, with current plans limited to an annual organic, maintenance capex in the range of ₹60–80cr. On the debt front, the company has seen an increase from ₹1400cr in FY17 to a peak of ₹2900cr in FY24 resulting in rising annual interest expenses (from ₹96cr to nearly ₹300cr). Capacity utilisation across its facilities has remained in the 60–65% range in recent years.

Present and Future Outlook

Revenue Projections

At full utilisation, Himatsingka’s manufacturing facilities are capable of generating revenues exceeding ₹4000cr. After reaching a high of ₹3200cr in FY22, revenues dipped in FY23 but bounced back to ₹2800cr in FY24, with FY25 expected to mirror this level. The company recently lost a few clients (including Bed, Bath & Beyond due to bankruptcy) and is currently reshuffling its client base. This transition of shifting from underperforming brands to more promising private label opportunities is anticipated to impose only minor short-term headwinds, likely lasting for one additional quarter. Post-restructuring, the company envisions buoyant demand, enhanced capacity utilisation, and increased revenue generation starting FY26.

Additionally, while the company had earlier postponed debottlenecking its sheeting and Terry towel plants due to an uncertain demand outlook in FY22, it has reintroduced plans to upgrade the Terry facility in FY25. This initiative, which will increase capacity by an additional 15,000 TPA to 40,000 TPA should potentially push revenues at full capacity beyond the ₹4000cr threshold.

The budding India operation, historically limited to the luxury drapery and upholstery segment under the Atmosphere brand, is set for rapid growth. With the introduction of the Himeya and Liv brands in FY23, the company expects revenues of ₹100cr in the current fiscal year, scaling to ₹300–400cr by FY27 and surpassing ₹1000cr by FY30.

Operating Margins

Management projects that operating margins will consistently range between 18–22% under normal conditions. In fact, they have been clear that margins are unlikely to exceed these levels. In periods of extreme volatility such as during the shutdowns in FY21 or the unprecedented price swings in FY23, margins have dipped as low as 10%. Under stable conditions, however, the 18–22% range is deemed both reasonable and highly achievable. Historically, operating margins have fallen in this range. 

To manage input cost volatility, Himatsingka maintains up to two months’ inventory of cotton and strategically increases stock when prices are favourable. On the energy front, an increase in captive power (from its green energy portfolio) to 28.7 gigawatts (accounting for roughly 20% of overall power consumption) is expected to generate significant power cost savings FY26 onward.

Debt Management

The company’s debt has grown significantly over recent years, approaching ₹3000cr in FY24, with interest expenses around 10% of the debt. In FY25, a slight reduction was observed, and in October 2025 the company raised ₹400cr via a Qualified Institutional Placement (QIP), deploying ₹325cr to reduce net debt to just over ₹2300cr. With further debt reduction being a top priority, As an aside, the last balance sheet update was in Q2FY25 when debt levels were still over ₹2900cr. The recent reduction to ₹2300cr aren’t yet visible on the financial statements and are only stated in the management conference calls. 

Even screener.in still reports debt at ₹2900cr. A reminder that data and ratios on available data providers/aggregators can sometimes be inaccurate and misleading as to the true (current) value and one should always make the effort to look into the financial statements and conference calls/commentary to get a truer picture of the current scenario. 

Capex Outlook

Himatsingka completed its last major capex cycle before the pandemic and does not foresee any significant capex projects in the medium term. Annual organic, maintenance capex is estimated at ₹60–80cr, with any debottlenecking or capacity expansion initiatives incorporated within this budget. Consequently, depreciation expenses have remained relatively stable, averaging between ₹150–160cr annually since FY20.

Marquee Investors on Board

In October 2025, Himatsingka successfully raised ₹400cr through a QIP, attracting investments from notable marquee investors. Abakkus Asset Managers (Sunil Singhania) acquired approximately a 6.8% stake, Cohesion MK (Madhusudan Kela) secured around 4.1%, and Jupiter Asset Management, a British fund house managing over $45 billion globally, increased its stake to 6.25%. Combined, these investors hold roughly 17% of the company post-QIP, bolstering confidence in Himatsingka’s future prospects.

Valuation

Conservative Case

Based on management’s outlook, the company is expected to achieve full capacity with revenues of around ₹4000cr within the next two years (FY27), excluding additional potential from the planned Terry towel plant debottlenecking. 

Conservatively, I assume revenues will only grow to ₹3500cr, and take the lower end of the operating profit margin of 18%, which gets me an estimated FY27 EBITDA of approximately ₹630cr. I estimate depreciation to increase 5% annually (given there are no additional capex plans) to about ₹175cr in FY27. That gets me an estimated EBIT of ₹455cr. 

Historically, Himatsingka’s enterprise value (EV) has traded at multiples ranging from 9.5x to 32x EBIT, with an average of 18x over the past 5 years. Since FY16, the company has never traded below 11x until last FY. 

Conservatively applying an 11x EV/EBIT multiple yields an enterprise value of around ₹5000cr. Assuming no further debt reductions and assuming net debt remains at approximately ₹2300cr, the implied market capitalisation would be about ₹2700cr. With 12.77cr shares outstanding, this valuation translates to roughly ₹210 per share. Discounting this figure at an annual rate of 15% produces an estimated current share price of approximately ₹151. 

Optimistic Case

I assume revenues will reach 4000cr in 3 years’ time. Further, I assume operating margins of 20% and net debt levels reaching ₹2000cr by FY28. I also assume a 13x EV/EBIT multiple. That gets me an estimated market capitalisation of ₹6000cr or ₹470/share. Discounting this back 15% gets me a current estimated share price of ₹288/share. 

Conclusion

All said, I see little downside in Himatsingka and satisfactory upside, looked conservatively. Moreover, the debt reduction and recent participation of marquee investors such as Abakkus Asset Managers, Cohesion MK, and Jupiter Asset Management further reinforces confidence in the company's strategic direction.