This article first appeared on GuruFocus .
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Revenue:INR202.4 crore in Q1 FY27, up 10.1% year-over-year from INR183.9 crore in Q1 FY26.
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Gross Margin:Stable at 37.4% versus 37.7% in the corresponding quarter last year.
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EBITDA:INR15.7 crore, up 29.1% year-over-year from INR12.2 crore.
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EBITDA Margin:7.8%, improved by 120 basis points year-over-year.
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Net Profit After Tax:INR8.3 crore, up 50.2% year-over-year from INR5.5 crore.
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PAT Margin:4.1%, improving by 110 basis points year-over-year.
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Net Cash Surplus:INR7 crore as of June 30, 2026.
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Channel Contribution:Exports contributed 4% to overall revenue; modern trade including e-commerce contributed 5%.
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Release Date: August 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue grew 10.1% year-on-year to INR202.4 crore, driven by healthy volume traction.
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EBITDA increased 29.1% to INR15.7 crore, with margin improving 120 basis points to 7.8%.
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Net profit surged 50.2% to INR8.3 crore, with PAT margin up 110 basis points to 4.1%.
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Company maintains a net cash surplus of INR7 crore, reflecting strong liquidity and financial flexibility.
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Management guides for 10-12% revenue growth and 9-10% EBITDA margin in the coming quarter, supported by a favorable yarn price environment and planned rationalization of advertisement spends.
Negative Points
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EBITDA margin of 7.8% fell short of the guided 9-10% due to elevated advertisement and marketing spends at 10.5% of revenue.
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Price hikes taken in April were offset by intense competition, as competitors passed on extra schemes, delaying realization of price increases.
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Competitive intensity remains elevated, with organized players offering higher discounts to gain market share, pressuring margins.
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Athleisure segment growth was soft in Q1, with only 5-7% year-on-year growth, though management expects double-digit growth from Q2.
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Women's segment continues to underperform, with management acknowledging it has not done as well as expected and requiring significant team and brand rebuilding efforts.
Q & A Highlights
Q: What were the key reasons for the shortfall in EBITDA margins versus the company's guidance of 9-10%? A: Sumit Khowala, CFO, explained that advertisement and marketing spends were elevated at 10.5% of total revenue during Q1. The company plans to rationalize this to 6-7% going forward, which should help achieve the desired EBITDA margin levels.
Q: The company took a price hike in April, but the impact is not reflected in realizations. Why, and when will the full impact be seen? A: Vikash Agarwal, Whole-time Director, stated that while a price hike was taken, intense competition led competitors to pass on extra schemes to the trade, forcing the company to match them. He is hopeful that new rates will be implemented in August, though the final outcome depends on the competitive scenario.
Q: How is the order book for the thermal segment shaping up for FY27, and what is the current visibility? A: Sumit Khowala, CFO, confirmed a sound and healthy order book for thermals, with expectations of better contribution compared to last year. Vikash Agarwal added that while order commitments are good, actual numbers depend on how the winter season performs, but the initial impression is positive.
Q: With yarn prices on an uptrend, is the company considering further price hikes to offset the increase in costs? A: Vikash Agarwal confirmed that yarn prices are high and that the company will implement a further rate hike in August. However, the final decision will depend heavily on how competitors behave in the market.
Q: Can you elaborate on the INR21 crore brand development spend (10.5% of revenue) and the portion allocated to brand endorsement fees? A: Sumit Khowala, CFO, stated that 35-40% was spent on ATL (Above The Line) and the rest on BTL (Below The Line) activities. Vikash Agarwal added that endorsement fees for brand ambassadors like Ranveer Singh, Ranbir Kapoor, and Yash account for 10-12% of this spend.
Q: What are the key initiatives for the modern trade and e-commerce channels, and what growth is expected? A: Vikash Agarwal stated that the company sees huge potential in modern trade and has appointed senior heads for the e-commerce business. They are building the right infrastructure for warehousing, inventory management, and IT. The company is looking at more than double-digit growth, specifically targeting 20-25% growth in e-commerce.
Q: How is the women's segment progressing, and what initiatives are being taken to improve its performance? A: Vikash Agarwal acknowledged that the women's segment, led by the Softline brand, has not performed as well as expected. The company is undergoing a major brand change, building a relevant product portfolio with new fabrics, and establishing a strong team with NSMs and ZSMs in place. They are hopeful for better performance in coming quarters.
Q: How is the athleisure segment performing, and what is the growth outlook? A: Vikash Agarwal stated that athleisure is doing quite well, with strong numbers in Q4. Q1 was slightly soft due to the high base from Q4, but the company expects at least double-digit growth from Q2 onwards. Sumit Khowala, CFO, clarified that Q1 FY27 saw 5-7% year-on-year growth, with expectations of more than double-digit growth for the full year.
Q: What is driving the high competitive intensity, and why are price hikes difficult to sustain? A: Vikash Agarwal explained that a few organized players are offering extra discounts to gain market share. He noted that many brands had old stock at lower prices, which is now being exhausted. With fresh, higher-priced stock coming in, he is hopeful that new rates will be implemented from August onward, leading to a better pricing environment.
Q: What efforts are being taken to improve return ratios (ROCE/ROE), which have declined from historical highs? A: Vikash Agarwal acknowledged that the current ROCE and ROE are not desirable but attributed this to a tough competitive phase in the industry. The company is taking initiatives to shift from a wholesale business model to a secondary sales model, focusing on LFS, e-commerce, and other channels. He is confident that return ratios will improve in the coming years as these initiatives take effect.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
