EBITDA Margin: 3.5% (44 bps higher than last year, 66 bps higher than Q1)
Profit After Tax: ₹70 crores, up 144% QoQ and 44% YoY
PAT Margin: 1.6%
H1 FY27 Performance
Revenue: ₹7,876 crores, up 23% YoY
Gross Margin: Expanded 37 bps to 20%
Gross Profit: Grew 25% YoY
EBITDA: ₹249 crores, up 62% YoY
EBITDA Margin: 3.2% (77 bps expansion)
PAT: ₹98 crores, up 44% YoY
PAT Margin: 1.3%
Segmental Performance (H1 FY27)
Sourcing Business
Revenue: ₹7,542 crores, up 25% YoY
EBIT: ₹175 crores
EBIT Margin: 2.3%
Manufacturing Segment
Revenue: ₹452 crores
EBIT: ₹26 crores
EBIT Margin: 5.8%
Operational Highlights
Order Book & Growth Drivers
Order book stood at ₹5,670 crores as of October 2026, up 13% YoY
Americas region grew 54% in Q2 and 44% in H1 FY27
Key accounts opened with major US retailers including Walmart, Target, Kohl's, Fashion Nova, CVS
Sourcing as a Service contract secured with large French retailer (5-year engagement managing $550 million annually)
GMV executed in H1: ₹11,366 crores, up 12.5% from ₹10,100 crores in H1 last year
Geographic Performance
US market sales: $184 million in H1
Key account performances:
Walmart: ~$20 million sales
Kohl's: ~$31 million sales
Fashion Nova: ~$40 million sales (54% growth)
Balance Sheet & Capital Efficiency
Net working capital: Improved to negative 5 days in September 2026 from positive 4 days in March 2026
Net debt position: Transitioned from ₹105 crores net debt at March 2026 to ₹154 crores net cash at September 2026
ROCE (excluding new verticals): 28% compared to reported ROCE of 22%
Prepaid long-term facility: ₹35 crores facility from Bajaj Finance prepaid in Q2
Cost Structure Analysis
Employee Expenses
Q2 Employee expenses: ₹396 crores, up 17% QoQ
Increase primarily due to preponement of annual increments and incentive payout to July (previously in October)
H1 Employee expenses: Up 17% YoY, including ~9% impact from forex movement
Other Expenses
Q2 Other expenses: ₹340 crores, up 33% QoQ
Driven by semi-variable costs including license and marketing fees, onboarding costs for new SaaS businesses, higher freight expenses for DDP/LDP business to US
Finance Costs
H1 Finance costs: ₹78 crores, up 2% in rupee terms but down 7% in dollar terms despite top line growth
Reduction due to lower use of invoice financing and import facilities, higher use of factoring and operational cash
Investment in New Verticals
H1 FY27 investment: ₹34 crores compared to ₹72 crores in corresponding period last year (53% reduction)
FY24-25 investment: ~₹168 crores
Target: Reduce to ~₹80 crores in FY26-27
Maintainable annual run rate: ₹40-50 crores
Ted Baker New Lobster Performance
H1 FY27 revenue: ₹268 crores, up 30% from ₹205 crores in same period last year
H1 FY27 loss: ₹11 crores compared to ₹30 crores loss last year
Gross margin: 22% in H1 (up from 18% last year but down from 30% in Q1)
Management exploring strategic options including partnerships, cost rationalization, potential relocation from Central London
Business described as "most challenging operation" with focus on resolution within FY27
Manufacturing Segment Challenges
Revenue growth muted in H1 (flat YoY)
Factors affecting performance: Management change stabilization, customer caution in Bangladesh order allocation
Initiatives for improvement:
Knit Gallery (India): Moving from value to value-plus fashion customers, targeting ASP increase from $1.20 to $1.50
Bangladesh: Partnership with Busana Group Indonesia to access premium customers (HUGO BOSS, PVH, Uniqlo, Lululemon)
Technology Initiatives
Focus areas: SAP S/4HANA, procurement transformation, real-time factory quality, AI-led design, pricing intelligence, master data management
China subsidiary achieved multifold turnover increase with same team using AI tools
Corporate Developments
Independent director Mr. BG Srinivas resigned due to personal and professional commitments (taking Chairman role at US company)
Portfolio rationalization: Merged Design Arc into Poeticgem, exited DBS Lifestyle
Interim dividend: ₹2.2 per share declared for FY27, representing 33% increase over previous year
Management Guidance & Outlook
Maintain cautious approach due to geopolitical uncertainties and tough global environment
Target 50-70 bps annual improvement in EBITDA margin and PAT margin
Intermediate goal: Achieve 3% PAT margin
US market potential: Could reach 40-50% of business in next 4-5 years
Order book provides visibility for 9 months with 13% growth
Focus on profitable growth, cash conservation, and balance sheet strength
Minority Interest
Q2 minority interest: 39% of PAT (elevated due to Ted Baker losses, subdued manufacturing performance)
Target: Return to ~25% level as Ted Baker resolves and manufacturing improves
