Business India ×
  Magazine:
Corporate Report

Published on: Oct. 7, 2023, 7:51 p.m.
BSL: Knitting it well
  • Nivedan Churiwal: enjoying strong brand equity; Pix: Sajal Bose

By Sajal Bose. Executive Editor, Business India

The basic strength of the textile industry in India is its robust production base, extending from a wide range of natural fibres to man-made fibres, with access to skilled manpower. The industry is diverse, with hand-spun and hand-woven textiles sectors at one end of the spectrum and the capital-intensive sophisticated mills sector at the other end. The adaptation of new products and technologies and going up the value chain has witnessed a major transformation of the industry in the last half-decade or so. 

The Kolkata-based BSL Limited is one of the oldest players in the textile industry, which always emphasises on product innovations, new technology adoptions and sustainable solution. “We were one of the first movers of manufacturing of poly-viscos suiting in the country and the first in Rajasthan state,” recalls Nivedan Churiwal, managing director. 

BSL today engaged in manufacturing of fabrics and yarns in India and still enjoys strong brand equity among the mass segment of the textile industry. It produces 20 million metres of fabric per annum, including furnishing fabric. It comprises a wide range of polyester viscose fabrics and premium range of worsted suiting. All business operations of the company are based in Bhilwara, spread across 47 acres.

Currently, the company has three-business verticals – suiting, furnishing and spinning – and has achieved a turnover of Rs472 crore in 2022-23, employing 3,500 people. As much as 65 per cent of its revenue comes from exports. “Despite all odds the industry had faced during Covid time, we have maintained profitability,” says Churiwal. 

The company has been strengthening its market in the burgeoning textile sector. Looking at the demand trend and the future growth potential in the segment, BSL has recently set up a cotton yarn unit adjacent to its existing plant at Bhilwara in Rajasthan. 

The new state-of-the-art unit has an installed capacity of 30,000 spindles, enabling the production of 8,400 tonnes of cotton yarn per annum from its two production lines. This yarn unit was commissioned in a recorded time of less than one year, at an investment of Rs150 crore, funded through internal accruals and bank loan. “The cotton yarn unit will contribute Rs250 crore to the company’s top line,” informs Praveen Jain, director, operations & CFO. 

Cash positive unit

This fully automatic unit offers different counts (1/20, 1/30) of 100 per cent cotton yarn, ranging from combed yarn, carded yarn and siro spun yarn for both export and domestic market. At present, BSL is exporting cotton yarn to Bangladesh, Turkey, Egypt and Taiwan, while downloading the rest in the domestic market. Jain claims that the company’s cotton yarn unit is already cash-positive and, in the next few months, will be fully occupied with orders.

“India is one of the fastest-growing cotton spinning businesses in the world,” remarks Churiwal, commenting on expansion. “And, there is an extensive market for cotton yarn and other cotton-based products in the country and abroad. The cotton will add to our diverse portfolio”. He also admits that the company is a late starter in cotton yarn business. China is the biggest cotton producer but, post-Covid, the western market has developed a physiological barrier towards China. And, the buyer’s focus has shifted to India. This is helping Indian market to excel in cotton yarn and fabric, adds Churiwal. The company is also mulling further expansion in cotton.

  • Jain: adopted the IKEA model for all facilities

This is just a beginning for BSL, says Pankaj Singhania, founder, Lakewater Advisors, an equity research firm in Kolkata. “There is a strong demand for quality cotton yarn both in domestic and overseas. BSL will have an edge over its peers, as it is not only quality-conscious but also focussed on brand building.”  

The heritage brand BSL (formerly known as Bhilwara Synthetic Limited) was founded in 1971 after obtaining the hard-to-get licence for setting up textile plant in Rajasthan. It had foreseen that the demand for polyester suiting was on the rise. Later, in 1977, the company established its processing unit – the first processing unit in Rajasthan, with a capacity of 125,000 m per month.

This helped the company to be cost-competitive among peers, who used to send fabric for processing outside Rajasthan. Progressively, Bhilwara emerged as a famous textile city in the country, with organised and unorganised textile looms mushrooming around Bhilwara. The town today produces 60-70 million metres of fabric per month, including denims, of which just 15 per cent is organised. 

BSL faced several ups and downs of business cycles, but careful strategising helped the company to stay relevant in the industry. There were other home-grown suiting brands, such as Dinesh, S Kumar’s, Jiyaji, Grasim, Graviera and OCM, which ceased to exist or have merged with other brands in the last few decades. According to an industry expert, they failed to adapt to the changes with time and was left behind in innovations and aggressive marketing strategy in competition with large players like Raymond and Siyaram. Also, shifting of consumers to branded apparel added to the woes.

The IKEA connection

BSL always focussed on cost efficiency and optimum capacity utilisation of its plants. Arun Kumar Churiwal, chairman, has immense knowledge of the segment, whereas his only son Nivedan, 49, is the driving force of the company’s future. Nivedan’s relentless effort to become a vendor for the largest global home furnishing Swedish retail giant IKEA in 2011 was a major turning point in the BSL growth story. The company is today the exclusive supplier of furniture fabrics from South Asia for IKEA and its products are available in all 450 IKEA stores globally. 

IKEA enlistment was a big challenge. “It took us two years to get it. It is a great learning experience, to work with IKEA and meet their compliances. Today, any IKEA store globally would have at least a few sofa-set fabrics made by BSL,” Nivedan says with pride. The company produces 5 million m of furnished fabric for IKEA, which is 100 per cent recycled. BSL manufactures according to the yearly forecast from IKEA. The company’s R&D develops new articles, according to the needs of the Swedish giant. 

The IKEA furnishing business contributes 18 per cent of the company’s revenue and it is growing. The production unit for IKEA at Bhilwara is separate from the BSL manufacturing facilities. The state-of-the-art automatic unit rigorously maintains rigid parameters and compliances with IKEA protocol, before the final product rolls out after weaving. 

BSL management claims that with IKEA is also exploring to reduce the dependency on China’s supply. If that happens, BSL is going to be a major beneficiary and is expected to ramp up its business with IKEA. Due to BSL’s strong foundation and leadership, it has emerged as one of the key IKEA vendors for furnishing fabrics outside China, points out a senior professional in the textile industry.

  • BSL always focussed on cost efficiency and capacity utilisation

“We have adopted the IKEA model, including social compliance in all our facilities at Bhilwara. We have zero liquid discharge and are also moving away from fossil fuel to bio-fuel and getting into alternate source of energy like solar and wind,” says Jain.

“BSL is an aggressive and innovative player in the textile industry, backed by efficient management. With good infrastructure and top-notch quality, it has successfully demonstrated the capability to meet the stringent parameters of an MNC giant like IKEA,” says Ritesh Dodhia, director, Dodhia group, a Mumbai-based textile manufacturer.  

BSL is expanding its domestic business with three different brands. It has also introduced a new direct-to-retail premium brand Geoffrey Hammonds – Insignia. This has received good response for making suit length and trousers. The existing two brands – Geoffrey Hammonds and BSL are also being revamped with extensive expansion of network. The company has set a target to double the dealer base pan India (from 90) within next one year.

Typically, for BSL, South and West markets are strong. Its management’s vision is to have uniform share across India. Vim Tex, a Bengaluru-based BSL dealer, has been associated with the company for last 35 years. D. Lunawat, the owner of the dealership, says, “BSL is a reputed brand in the mass product category. It is a quality-driven company. The management is transparent on dealerships.”

Domestic appetite, global demand

The Indian textile & apparel industry is pegged at $105 billion, with 71 per cent by domestic consumption and 29 per cent exports in 2021. And, as per the prediction, by 2026, the industry is likely to expand to $250 billion at 17-19 per cent CAGR. The exports are expected to grow by 81 per cent to $65 billion from the pre-Covid levels of $36 billion in 2019. The swelling domestic appetite for garments and demands for apparel in western countries has resulted in higher sourcing from India by international brands to meet the demand would drive the growth.

In 2022-23, BSL has achieved revenues of Rs471.73 crore, as against Rs435.84 it earned in 2021-22. And the net profit reported is Rs16.91 crore, against Rs11.48 crore in the previous year. “In 2022-23, despite the significant challenges we faced, such as historically high input costs and a slowdown in key global markets, our businesses have demonstrated improved performance,” says Nivedan. “Our cost rationalisation efforts and diversified product portfolio were also crucial in achieving these results,” the management claims.

In the first quarter of 2023-24, BSL has recorded notable growth and resilience in its operational revenue by an increase of 35 per cent q-o-q and 43 per cent y-o-y. This has culminated in a total income of Rs161 crore.  The company’s gross profit for the quarter stands at Rs71 crore, reflecting a growth of 21 per cent q-o-q and 17 per cent and y-o-y, showcasing its ability to effectively manage production and costs.  The EBIDTA has also grown by 46 per cent y-o-y, reaching Rs15 crore in the quarter.

“There's a clear improvement in demand, both from overseas and within the country. Our persistent efforts to do well in important markets are showing good outcomes, as we focus on adding value, becoming more efficient in fund allocation and upgraded technology,” Nivedan points out. He has set a target to achieve a turnover of Rs1,000 crore by 2025.

  • IKEA association gave a new lease of life for BSL

The market cap of BSL stands at Rs189 crore, at a current share price of Rs182. The promoters hold 56.71 per cent of the company’s shares as on June 2023, with the rest remaining with the public/bodies corporates (38.02 per cent), MF/insurance companies (1.99 per cent), FIIs/banks/ NBFCs (0.56 per cent) and others/NRIs (2.72 per cent). 

BSL is now exploring to enter into technical textiles, which are defined as textile materials and products used primarily for their technical performance and functional properties, rather than their aesthetic or decorative characteristics. Depending on functionality and properties, technical textiles have a variety of categories. They provide varied performance and functionality according to the type. Different types of fabric are used for different types of work, with its application and end use found in segments like medi-tech, agro-tech, build-tech and pro-tech, etc. 

“It is a rising industry, with huge growth potential. We are looking into it seriously. But it is at a nascent stage and too early to share more details about the plan,” says Nivedan.  

With immense brand value and established markets, the company expects to continue to retain a significant position in the segment.

Special Report

Will Modi’s ‘Mission South’ succeed?

Either way, the 2026 delimitation could be a headache

Focus

Why Gandhinagar and not Mumbai for GIFT city?

Mumbai is more suited as an international financial services centre (IFSC)

Corporate Report

Tribeca Developers: Delivering excellence

Tribeca Developers is ramping up its presence in the luxury residential market

Cover Feature

How soon gold will hit Rs1 lakh, or even Rs2 lakh mark?

Gold is expected to outperform every other asset class on the planet by a mile

E-MAGAZINE
Up, Up and Up
Indian Elections and Markets
Modi 3.0
FROM THIS ISSUE

ESG

Hospitality

CSR

Corporate Report

Corporate Report

Corporate Report

Agriculture

The introduction of black pepper as an inter-crop in the sopari and coconut orchards, has enabled farmers to cultivate crops simultaneously

Skill Development

In 2020-21, the programme reached over 112,482 girls in urban and rural locations across six states in India, including 10,000 across Delhi

Collaboration

The event brought together stakeholders and changemakers to participate in a series of conversations on global trends and recent developments

Healthcare

The programme will focus on educating children on oral health and building awareness around the dangers of tobacco use

Biogas

German BioEnergy enters Indian market

Published on Aug. 17, 2023, 11:54 a.m.

BioEnergy will showcase its innovative biogas technology in India

Mobility

Ather looks to double its market share

Published on Aug. 17, 2023, 11:26 a.m.

Ather aims to produce 20,000 units every month, soon

Green Hydrogen

‘Kerala Hydrogen ecosystem a model for all states’

Published on Aug. 17, 2023, 11:06 a.m.

German Development Agency, GIZ is working on a roadmap for a green hydrogen cluster in Kochi

Renewable Energy

Adani Green eyes 45GW RE

Published on Aug. 17, 2023, 10:45 a.m.

AGEL set to play a big role in India’s carbon neutrality target