On 5 December 2024, Punjab-based textile manufacturer AB Cotspin India (ABC India) announced that the company was eyeing a rise of over 8-10 per cent in its turnover to around Rs275–290 crore in the current fiscal year, mainly on the back of an improved order book. Then, on 2 January 2025, the company made another announcement, stating that it had secured a new order for supplying 300 metric tonnes of high-quality cotton yarn. “The order reflects our commitment to exceptional quality, efficient delivery, and building lasting customer trust, further solidifying our position as a preferred partner in the textile industry,” says Deepak Garg, MD of AB Cotspin India.
Established in 1997, the company has evolved from a cotton ginning operation into a fully integrated manufacturing unit with 36,200 spindles. With the SEL acquisition, the company’s spindle capacity will expand by 40 per cent, increasing to 50,792 spindles by March 2025. This upgrade is expected to drive further production and revenue growth.
Its client list includes renowned names like Shivalik Print Ltd, Jawandsons Ludhiana, and Parmeshwari Silk Mills. The company also serves international brands by associating with suppliers like IKEA, Walmart, JC Penney, and Nautica.
Elaborating on the company’s game plan, Garg says: “With an extensive range of products and a focus on innovation, we are well-positioned for growth in the competitive textile market. Further, securing repeat orders emphasises the trust in the company’s ability to deliver high-quality products consistently.”
With an order book valued at approximately Rs26.35 crore, the company is strategically positioned to meet future demand and sustain growth. “The order flow supports our financial projections, as we aim for sales between Rs275 crore and Rs290 crore and an EBITDA of around Rs32 crore for FY24-25. Our focus on quality, innovation, and sustainability has enabled us to build strong, enduring partnerships with prestigious clients,” he adds. For the year ended March 2024, the company reported a turnover of Rs255.77 crore and an EBITDA of Rs27.64 crore.
ABC India’s CFO, Rajinder Prashad Garg, adds: “As part of its strategic growth plan, we aim to acquire SEL Textiles, which will further strengthen the company’s market position and enhance its ability to deliver timely and efficient services to its customers. The acquisition would strengthen our infrastructure, enabling faster and more efficient delivery of high-quality products. Also, it would bolster our presence in domestic and international markets, paving the way for greater industry influence.”
ABC India has incorporated sustainability as a part of its culture and has undertaken several initiatives in this direction. It operates on the ‘Farm-to-Fabric’ philosophy. The company procures high-quality raw cotton directly from farmers and processes it in-house, ensuring complete control over production. This approach guarantees superior product quality and supports local farmers by providing consistent business opportunities.
Niche products
The company specialises in manufacturing niche products such as slub, fancy yarn, and multitwist yarn, catering to the fashion and home furnishing industries. These products are widely used in high-end garments, including jeans and luxury apparel, making the company a preferred supplier for leading brands. The integrated nature of its operations and diversified product profile provides an added advantage. The company’s ginning capacity
of 8,500 tonnes per annum (TPA) meets the entire requirement of its spinning unit, which has an installed capacity of 4,290 TPA. Furthermore, the yarn requirement for the knitted fabric manufacturing unit is also met in-house. The company engages in oil extraction and the production of cakes from cotton seeds (a by-product of the ginning process). Consequently, its product profile is diverse, comprising ginned cotton, cotton seeds, cottonseed oil, cotton yarn, and knitted cotton cloth.
The yarn is further processed to manufacture various types, including 100 per cent cotton yarn of counts 20-30s, double yarn of counts 20–30s, slub yarn, and more. ABC India also produces various types of knitted fabrics, which include combed, carded, and slub fabrics. It generates approximately 60–75 per cent of its revenue from cotton yarn, with the balance coming from other products. Looking ahead to 2025-27, it anticipates generating 50 per cent of its revenue from yarn and 50 per cent from fabric.
The company has also started integrating recycling into its core operations by utilising recycled cotton, both pre-consumer (spinning waste, yarn waste) and post-consumer (used clothing, upholstery), to produce a diverse range of yarns and garments. This aligns with global recycling standards (GRS) and reduces environmental impact by minimising waste generation, particularly wastewater from dyeing processes. Additionally, it has recently installed 300 KW of solar power, bringing its total installed solar capacity to 2,800 KW. An additional 331 KW of solar power is currently under installation and is expected to become operational within the next few months.
A recent CARE Rating note states: ‘ABC India benefits from the location advantage in terms of easy accessibility and proximity to a large customer base. The company operates in a cotton cultivation belt, which leads to easy and ample availability of raw materials and lower freight costs. ABC India operates from its manufacturing unit in Bathinda, Punjab. At the same time, it sells its products directly to textile units located primarily in Punjab and Haryana. Both these states are well-established textile hubs with a large number of spinning and garment units.’
Independent SEBI-registered analyst Sumeet Jain says: “The company generates revenue of around 60-75 per cent from cotton yarn, with the balance coming from other products. At the same time, the requirement for yarn for the knitted fabric manufacturing unit is met in-house. The company also engages in oil extraction and the production of cakes from cotton seeds (a by-product of the ginning process). Hence, the company’s product profile is diverse, comprising ginned cotton, cotton seeds, cottonseed oil, cotton yarn, and knitted cotton cloth. The yarn is further manufactured in various types, including 100 per cent cotton yarn of counts 20-30s, double yarn of counts 20-30s, slub yarn, and so on. It also produces knitted fabrics, including combed, carded, and slub fabrics.”
Advantage India
Stable commodity prices and the Bangladesh +1 factor have caused a shift in orders from Bangladesh to India, given the ongoing political turmoil there. Demand revival at key textile hubs such as Tirupur and Surat has led to capacity utilisation increasing to more than 90 per cent. Order visibility has soared, as evident from the robust bookings of companies for the next two quarters. The government is likely to resume discussions on a Free Trade Agreement (FTA) with the UK this year.
“We believe FY26 could be robust for India’s textile sector. Companies that have expanded capacities in the last 12 months or committed to expansion capex would benefit from the surge in demand from the Bangladesh +1 strategy. We maintain our positive stance on the sector,” states Systematix Institutional Equities in its note on the sector.
According to the broking house, India’s cotton yarn exports saw a remarkable 83 per cent increase in FY24, with the share of yarn exports rising from 19 per cent of total production in FY23 to 32 per cent. This growth was primarily driven by increasing demand from China, which faces allegations of forced labour in Xinjiang cotton pro-duction. Bangladesh, China, and Vietnam account for 60 per cent of India’s cotton yarn exports. Positive signals are also emerging from key textile hubs in India, with Tirupur operating at 95 per cent of its installed capacity, indicating strong market demand.
In addition to the growing export demand for raw cotton yarn, there is a notable shift towards high-value exports, with demand for value-added products on the rise. This signals a transformation towards value-driven offerings in the Indian textile sector.
Soaring high
With a market capitalisation of around Rs450 crore, ABC India’s stock has surged more than 76.13 per cent in the last six months. The stock traded at around Rs435.00, with a 52-week high of Rs516 and a 52-week low of Rs123.35. Adds Sumeet Jain: “With the company strategically moving into fabric, we believe that by 2025–27, 50 per cent of the company’s revenue will come from fabric and 50 per cent from yarn. With its robust financial performance, innovative product portfolio, and unwavering commitment to sustainability, ABC India is poised to set new benchmarks in the textile manufacturing industry.
The company’s strategic moves, including its planned acquisition of SEL Textiles and capacity expansion, reflect its aspiration to emerge as a market leader. By combining cutting-edge technology, a sustainable ethos, and a customer-first approach, the company is charting a path towards a brighter, more prosperous future in the global textile landscape.