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.

“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.

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.