Raj Rayon targets Rs 2,900 cr revenue by FY27

Raj Rayon aims to increase its revenue to Rs 2,900 crore by FY27. Of this, the company aims to generate Rs 780 crore from Partially Oriented Yarn (POY), Rs 1,760 crore from Drawn Textured Yarn (DTY), and Rs 360 crore from chips. To achieve this, the company plans to invest Rs 500-600 crore over the next two to three years, primarily in new machinery with cutting-edge technology. This investment will help boost the company’s POY capacity from 225 TPD (tons per day) to 600 TPD, and DTY capacity from 100 TPD to 400 TPD.

Raj Rayon expects to increase gross margins through a strategic shift towards higher-margin products via continuous polymerization processes, ultimately driving higher net profit margins. The company hopes to maintain sustainable margins of 5-7 per cent for POY and 10-12 per cent for DTY. It also plans to launch new products in yarns and knitted fabrics, which are expected to be margin-accretive.

Formerly Raj Rayon, Raj Rayon Industries specializes in the manufacturing of high-quality man-made fibers, primarily Polyester chips, Partially Oriented Yarn (POY), and Drawn Textured Yarn (DTY). After facing challenges that led to a cessation of production in 2018, Raj Rayon Industries was strategically acquired by the SVG Group in 2021. This acquisition has been pivotal in revitalizing the company's operations and positioning it for growth.

SVG Group's acquisition has integrated Raj Rayon's upstream capabilities (fiber production) with SVG's downstream processes (fabric and garment manufacturing), optimizing the entire value chain. SVG's strong market presence and client base, including major brands, ensure a steady order flow for Raj Rayon.