Financial Performance Highlights

Q2 FY27 Financial Results:

  • Revenue (NSV): ₹1,559 crores versus ₹1,418 crores in Q2 FY26, representing 10% YoY growth
  • Adjusted revenue growth (excluding festive and online tower event shifts): Nearly 15% YoY
  • EBITDA (excluding other income): ₹216 crores versus ₹187 crores in Q2 FY26, representing 15.5% growth
  • EBITDA margin expansion: 67 basis points YoY
  • PAT: ₹48 crores versus ₹37 crores in Q2 FY26, representing 29% growth
  • Pre-Ind AS basis: EBITDA grew 18% and PAT grew 38% YoY
  • Gross margin expansion: 136 basis points YoY

Operational Metrics:

  • Like-for-like (LTL) retail growth: 7.3%
  • Adjusted LTL retail growth (excluding calendar shifts): 10%
  • Online B2C growth: 28% YoY
  • Adjusted online B2C growth: 45% YoY
  • Marketing investment: Increased 24 basis points YoY

Channel Performance

Direct-to-Consumer (D2C) Strategy:

  • D2C channels now account for 53% of sales, up nearly 380 basis points year-on-year
  • Retail growth: 15.4% with 24 EBOs added in the quarter
  • Online B2C share increased from 12% to 13% of total sales
  • Tommy Hilfiger website and app launched in September 2026, with other brands to follow

Wholesale Performance:

  • Primary sales grew at high double digits in Q2
  • Channels well stocked for upcoming festive season

Brand Performance

US Polo Assn:

  • Delivered strong performance with high revenue growth, LTL, and profitability expansion
  • Growth achieved on top of high base in Q2 previous year

PVH Brands (Tommy Hilfiger, Calvin Klein):

  • Gaining momentum and recovered from GST setback
  • Growing at high single digits, almost touching double digits
  • Minority interest showing upward trajectory

Arrow and Flying Machine:

  • In transition year focusing on structural efficiency over near-term scale
  • Flying Machine positioned as him and her denim brand for Gen Z audience
  • Arrow focusing on modern professional segment with functionality-led products
  • Online B2C for Arrow grew 35%

Working Capital & Inventory

  • Inventory days increased but corresponding decline in receivable days
  • Gross Working Capital (GWC) days stable at 157 days (same as previous quarter)
  • Net Working Capital (NWC) days flat at 65 days
  • Total inventory: ₹1,828 crores versus ₹1,605 crores last year

Capital Expenditure (H1 FY27)

  • Total capex: Approximately ₹100 crores spent on:
  • New shirt manufacturing factory in Madhya Pradesh
  • New corporate office (current office outgrown after two decades)
  • Store expansion

Shirt Manufacturing Facility Details:

  • Location: Madhya Pradesh
  • Capacity: 300,000 units per month at steady state
  • Will meet 25-30% of total shirt requirements
  • Expected payback: 3-3.5 years
  • Strategic rationale: De-risking from Bangladesh imports impacted by geopolitical disturbances and rupee depreciation

Cash Flow & Debt Outlook (H2 FY27)

  • Cash requirements peak in Q2 due to seasonality
  • Estimated cash release: ₹150-175 crores of free cash flow
  • Primary use: Debt reduction
  • Net debt-to-EBITDA ratio currently below 1, expected to decline further

Business Outlook & Guidance

Festive Season Performance:

  • Pujo and Diwali sales tracking well with high double-digit LTL
  • Consumption pattern remains positive across all channels

Macroeconomic Watch Factors:

  • Inflation
  • Geopolitical developments
  • Potential El Niño effect
  • Repo rate changes

Growth Strategy Pillars:

1. Portfolio diversification: Leadership in top 5 apparel categories (shirts, polos, denim, t-shirts, blazers) and adjacencies (footwear and innerwear contributing 25% of business)

2. Building differentiated brands: Sharper positioning, deeper consumer connection, and innovation across all 5 brands

3. Direct-to-consumer organization: Target 65% D2C share through retail excellence and digital powerhouse development

4. Data, analytics and AI transformation: Focus on cost efficiencies and front-end effectiveness with dedicated team and AI Governance Council

5. Nimble supply chain: Shorter cycles, faster reads, less inventory risk through closer-to-market strategy

Financial Guidance:

  • Mid double-digit growth sustained in balance of year
  • 30-40 basis points EBITDA margin expansion
  • Continued focus on profitable growth, ROCE improvement, and strong cash flow generation

Organizational Structure

  • Reorganized into business unit structure for sharper accountability and speed
  • Centralized consumer brand marketing, digital, and data/AI initiatives
  • Specialist team working on tech, AI, consumer analytics and growth

Raw Material & Pricing

  • Cost inflation: 5-6% for like-for-like procurement
  • Cost increases mitigated through 1.5-2% MRP increases
  • Marginal pricing actions taken dynamically based on product mix strategy

Supply Chain Strategy

  • Moving toward closer-to-market drops across all brands
  • Implementing strong S&OP process to improve inventory effectiveness
  • Faster and more frequent drops for Flying Machine to catch trends

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