This article first appeared on GuruFocus .
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Q2 FY27 Revenue:INR 320.4 crore vs INR 320.2 crore in Q2 FY26; broadly flat YoY.
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Q2 FY27 Gross Margin:27.6% vs 27.4% in Q2 FY26.
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Q2 FY27 EBITDA:INR 26 crore vs INR 22.4 crore YoY; growth of 15.9%.
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Q2 FY27 EBITDA Margin:8.1%, up 110 bps YoY.
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Q2 FY27 Net Profit (PAT):INR 17 crore vs INR 14.5 crore YoY; growth of 17.4%.
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Q2 FY27 PAT Margin:5.3%, up 80 bps YoY.
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H1 FY27 Revenue:INR 522.8 crore vs INR 504.1 crore in H1 FY26; growth of 3.7% YoY.
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H1 FY27 Gross Margin:31.4% vs 31.2% in H1 FY26.
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H1 FY27 EBITDA:INR 41.7 crore vs INR 34.6 crore YoY; growth of 20.4%.
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H1 FY27 EBITDA Margin:8.0% vs 6.9% in H1 FY26.
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H1 FY27 Net Profit (PAT):INR 25.3 crore vs INR 20 crore YoY; growth of 25.9%.
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H1 FY27 PAT Margin:4.8% vs 4.0% in H1 FY26.
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Modern Trade Contribution:5% of overall business.
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H2 FY27 Outlook:Revenue growth of ~10% with EBITDA margin of ~9%.
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Release Date: November 03, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Thermal category grew 30% in Q2 FY27, showing strong traction.
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EBITDA for Q2 FY27 grew 15.9% YoY to Rs. 26 crore with margin expansion of 110 bps to 8.1%.
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PAT for Q2 FY27 increased 17.4% YoY to Rs. 17 crore, with margin improving 80 bps to 5.3%.
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H1 FY27 revenue grew 3.7% YoY to Rs. 522.8 crore, with EBITDA up 20.4% and PAT up 25.9%.
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Modern trade contributed 5% to overall business, providing channel diversification.
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Board approved appointment of Mr. Sunidwal Kalukdar as independent director, strengthening governance.
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Company guides for ~10% revenue growth and ~9% EBITDA margin in H2 FY27.
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Capex plan of Rs. 83 crore for warehouse development to support future growth.
Negative Points
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Q2 FY27 revenue remained flat YoY at Rs. 320.4 crore, missing growth expectations.
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Intense competition persists with price wars, discounting, and credit challenges.
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Working capital increased by Rs. 75 crore from March to September 2026, impacting cash flow.
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EBITDA margin at 8.1% is still below historical normal of 13-14%.
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Investor holding has declined from ~4% to ~2%, reflecting concerns.
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To achieve full-year 10% growth, H2 FY27 requires ~20% YoY growth, which is ambitious.
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Advertisement cost reduced to 4.7% of sales from 5.1%, which may impact brand building.
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Overall industry demand remains subdued, with major brands facing similar challenges.
Q & A Highlights
Q: With revenue broadly flat year-on-year in Q2 FY27, what drove the 110 basis point improvement in EBITDA margin? A: The CFO, Sumit Khowala, attributed the margin expansion to a roughly 30 basis point improvement in gross margin, savings in advertisement cost (down to 4.7% of revenue from 5.1% last year), and about 40 basis points of savings across other expenses, which together lifted EBITDA margin by around 110 basis points.
Q: What is the growth outlook for the thermals category, and how is the order book shaping up? A: The management stated that thermals showed good traction during the quarter, registering 30% growth, and expressed confidence that the category will continue to perform well through the rest of the year.
Q: The company was net debt-free earlier but is now debt-positive what explains this shift? A: The CFO, Sumit Khowala, explained that working capital increased by almost 75 crores between March 2026 and September 2026, and borrowings were increased to meet this working capital requirement.
Q: Can you provide details of the recently approved capex plan? A: The management outlined a total capex of around 83 crores approximately 58 crores for developing a warehouse in Western India and another 25 crores for construction of warehouse and storage facilities to support the modern trade business to be spent over about 2 to 2.5 years.
Q: You are guiding for around 10% revenue growth for FY27, but H1 growth was only 3.7%. Does this imply roughly 20% growth in the second half versus last year's second half? A: Responding to the individual investor's calculation, the management acknowledged the implied second-half acceleration and stated they are hopeful of achieving the targeted growth during the second half of the year.
Q: What is the current state of competitive intensity in the market? A: The CFO, Sumit Khowala, noted that intense competition persists, with a price war on schemes and discounts, and granting credit to receivables remains a big challenge. He confirmed the situation has not improved since the previous quarter's call.
Q: With promoter/institutional holding declining and margins well below the historical 13-14% EBITDA level, what is the medium-term outlook? A: The Whole-time Director, Vikas Agarwal, acknowledged that the industry is going through a highly competitive phase affecting all major brands, and expressed confidence that things will improve in the coming quarters.
Q: What were the key financial results for Q2 FY27? A: The CFO, Sumit Khowala, reported revenue from operations of 320.4 crores (flat year-on-year), EBITDA of 26 crores (up 15.9%), EBITDA margin of 8.1% (up 110 basis points), and PAT of 17 crores (up 17.4%) with a PAT margin of 5.3%.
Q: How did the company perform in H1 FY27? A: The CFO, Sumit Khowala, reported H1 FY27 revenue of 522.8 crores (up 3.7% year-on-year), EBITDA of 41.7 crores (up 20.4%) at an 8% margin, and PAT of 25.3 crores (up 25.9%) at a 4.8% margin, with gross margin at 31.4%.
Q: What is the full-year guidance for FY27? A: The Whole-time Director, Vikas Agarwal, guided for revenue growth of around 10% with an EBITDA margin of around 9% for the full year, supported by expansion of the distribution network, strengthening of secondary sales, and building a stronger leadership team.
Q: How is the modern trade channel contributing to the business? A: The management stated that modern trade contributed 5% to overall business, providing opportunities to strengthen and diversify the company's distribution channels.
Q: Were there any board-level changes during the quarter? A: The Whole-time Director, Vikas Agarwal, announced that the board approved the appointment of Mr. Sunidwal Kalukdar former Group Executive President and CFO of Indigo as an independent director, strengthening the governance framework and bringing additional experience to the board.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
