1. INTRODUCTION

• Brief Introduction of the company  

H.P. Cotton Textile Mills Limited is a public company in India that is listed on the Bombay Stock Exchange. It mainly makes sewing threads and yarn for both domestic and international markets. The company has built a strong presence over decades by focusing on making high-quality products and growing by exporting.

• Industry Overview  

The Indian textile and apparel industry is significant at global as well as at country level. This industry generates employment and improves the country's GDP. The industry has a very good future ahead, because of continuous changes in market demand and market trends. But the industry also faces many challenges related to raw material prices, global competition and consumer choices. 

• Purpose of the Analysis 

This research and analysis will help to understand the financial condition of Shekhawati Industries Ltd. also this analysis will help to know more about the company and about the textile industry in the country. The analysis will cover all companies’ profit and loss statements, balance sheets and key financial ratios. 

2. COMPANY OVERVIEW 

• Background and History 

H.P. Cotton Textile Mills Limited started in 1981 and has since become a well-known textile manufacturer.Hisar, Haryana is where its registered office and works are. The company is part of the well-known Dora Group and makes yarn for retail and industrial hosiery. Over time, it has increased its production capacity and built up its export base.

• Business model

The company follow Trading and Manufacturing Model-

1) Manufacturing- Production of high-quality sewing thread and specialty yarn.

2) Export – The company export model  with over 75% of turnover earned with foreign exchange.

3) Captive consumption – utilizing manufacturing hosiery yarn for internal processes to optimize the value chain. 

• Key Product and Services 

1) Sewing Thread 

2) Cotton Speciality Yarn 

3) Hosiery Yarn 

4) Knitting Yarn 

• Market Positioning 

The company is a reliable textile company globally especially in sewing thread. It markets itself as a high-quality manufacturer that uses cutting-edge technologies like automatic mercerizing and assembly winders. The company has a strong presence around the world, with Denmark, Japan, the Netherlands, and the United States being some of its biggest export markets.

3. PROMOTERS / FOUNDER

4. FINANCIAL ANALYSIS

• Income statement analysis                                                                      (In Lakhs)                                                                                                                              

                Key observations of Income Statement:

1. Revenue from operation has increased as compared to FY24. i.e. 12,813 lakhs
2. Net profit for FY25 is increased as compared to FY24.

• Balance sheet analysis 

                                                                                                                                    (In Lakhs)

End of the FY25 –

1) Equity share capital – Stable, no change in equity share holder.

2) Current assets - Current assets increased due to high inventory and receivables.

3) Current Liability –.This also increased because of increased short term borrowing.

• Cash Flow Statement 

                                                                                                                             (In Lakhs)

            Noted –

1)  Operating activity has decreased in FY25. i.e. 740 lakhs

2)  where cash from investing and financing activity is negative. 

• Key financial Ratio 

• Profitability Ratio  

Net Profit Margin = 2.01%

•  Liquidity Ratio  

  Current Ratio = 0.86

•  Leverage Ratio   

Debt / Equity Ratio = 2.21

• Efficiency Ratios

Earnings per Share = 6.57

• Year on year comparison ( 3 years revenue)

5. KEY INSIGHTS AND INTERPRETATION 

• Strengths

1. Consistent revenue growth over the years
2. Positive cash flow from operations
3. Balanced financial structure with moderate debt

• Weakness 

1. Profit margins are relatively low due to high competition
2. Dependence on raw material prices like cotton

• Risk factor 

1. Fluctuation in cotton prices affecting cost
2. Global competition and export market uncertainties

• Future Outlook 

The company appears to have a steady future with moderate development potential. Profitability can be increased by expanding into export markets and raising the demand for textile products. Long-term success, however, will depend heavily on innovation and cost containment.

6. CONCLUSION 

Final evaluation of financial condition

HP Cotton Limited is a stable and continuously growing company in the textile industry. The company shows good profitability which indicates better cost control and operational efficiency. By balance sheet and cash flow statement it shows the company is in good financial health.

Investment / Performance Perspective

From an investment point of view, HP Cotton Textile Mills Limited can be considered a moderate and stable performer rather than a high-growth company. It may not provide very high returns in the short term, but it offers consistency and lower risk, which is suitable for cautious investors.From an investment point of view, HP Cotton Textile Mills Limited can be considered a moderate and stable performer rather than a high-growth company.

Sources 

https://www.hpthreads.com/index.php 

https://www.screener.in/company/502873/#top