Whalesbook
Himatsingka Seide Limited announced it has received an Income Tax Assessment Order for the assessment year 2023-24. The order proposes additions to the company's taxable income totaling ₹51.70 crore, leading to a tax demand notice of ₹14.17 crore.
The company has strongly contested these proposed additions and the resulting tax demand, labeling them "unjustified." Himatsingka Seide plans to file an appeal against the assessment order. Management expressed confidence in their case and stated that the tax demand will not have any immediate impact on the company's financial, operational, or other activities.
Himatsingka Seide, established in 1985, is a vertically integrated textile manufacturer with a significant global presence across North America, Europe, and Asia.
The company's recent financial performance has shown fluctuations. Between fiscal years 2022 and 2025, net sales decreased from ₹3,183.95 crore to ₹2,778.20 crore. Profit before tax also saw a substantial drop, reflecting a challenging business environment and increased raw material costs. The company's stock has faced pressure, with reports in March 2026 indicating it had fallen to 52-week lows amidst market downturns.
This is not the first time Himatsingka Seide has engaged with tax-related litigation. In 2011, the Karnataka High Court addressed a dispute concerning deductions claimed under Section 10B of the Income Tax Act for assessment year 2006-07. Previously, the company also filed a writ petition seeking the release of approximately ₹49.26 crore under a technology upgradation fund scheme.
The primary risk centers on the ₹14.17 crore tax demand, which could affect cash flows if the appeal is not resolved favorably. The appeal process against the ₹51.70 crore additions represents a medium-term uncertainty. Given past tax disputes, there's a potential for prolonged legal processes as the company navigates complex tax regulations.
Himatsingka Seide operates within a competitive textile sector alongside peers such as KPR Mill Ltd., Vardhman Textiles Ltd., Trident Ltd., and Welspun Living Ltd. These companies navigate similar industry dynamics, including raw material costs and global demand.
Investors and stakeholders will be tracking the progress and outcome of Himatsingka Seide's appeal against the Income Tax Assessment Order. Further updates from the company regarding the appeal process or its financial implications will also be closely monitored, alongside the company's ability to maintain operational stability.