Key Financial Results (Q1 FY27)

Revenue Performance

  • Revenue from operations: ₹202.4 crores (Q1 FY27) vs ₹183.9 crores (Q1 FY26)
  • Year-on-year growth: 10.1%
  • Growth driven primarily by healthy volume traction
  • Value segment was key contributor to growth

Profitability Metrics

  • Gross margin: 37.4% vs 37.7% in Q1 FY26
  • EBITDA: ₹15.7 crores vs ₹12.2 crores in Q1 FY26
  • EBITDA growth: 29.1% YoY
  • EBITDA margin: 7.8% (improved 120 basis points YoY)
  • Net profit after tax: ₹8.3 crores vs ₹5.5 crores in Q1 FY26
  • PAT growth: 50.2% YoY
  • PAT margin: 4.1% (improved 110 basis points YoY)

Channel Performance

  • Exports contribution: 4% of overall revenue
  • Modern trade including ecommerce contribution: 5% of revenues
  • Both channels continue to gain traction

Balance Sheet Position

  • Net cash surplus: ₹7 crores as of June 30, 2026
  • Reflects continued focus on liquidity discipline and financial flexibility

Management Commentary & Business Updates

Raw Material Environment

  • Yarn prices currently on upward trajectory
  • Creating favorable pricing environment for the company
  • Competitive intensity remains elevated
  • Company adopting calibrated pricing approach

Marketing Expenditure

  • Advertisement and marketing spend: 10.5% of total revenue in Q1
  • Expected to be rationalized to 6-7% going forward
  • Breakdown: 35-40% on ATL (Above the Line), remainder on BTL (Below the Line)
  • 10-12% of total brand development cost goes to brand endorsement fees

Brand Ambassadors

  • Confirmed brand ambassadors: Ranveer Singh, Ranbir Kapoor, Wamiqa Gabbi, and Yash
  • Representing brands: Rupa, Frontline, Rupa Jon, Softline, and Macroman

Segment-wise Performance & Outlook

Thermal Segment

  • Sound and healthy order book for FY27
  • Expected to contribute better compared to last year
  • Performance largely dependent on winter season progression

Women's Segment

  • Current contribution: approximately 8% of revenue
  • Major brand: Softline undergoing brand font change
  • Building relevant portfolio with new fabrics
  • Strengthening team with NSM and ZSMs in place
  • Focus on secondary market and retailing

Athleisure Segment

  • Q1 performance: 5-7% de-growth compared to Q1 last year
  • Q4 performance was strong
  • Expecting double-digit growth from Q2 onwards
  • Annual expectation: more than double-digit growth

E-commerce & Modern Trade

  • Current base: ₹10 crores for the quarter (5% of revenue)
  • Expecting 20-25% growth in e-commerce
  • Building infrastructure including warehouse, inventory management, IT systems
  • Senior heads appointed for ecommerce business

Price Hike Implementation

  • Price hike of 4-5% taken in Q1 but partially offset by competitive schemes
  • New rates to be implemented in August 2026
  • Further price hike of 4-5% planned but dependent on competitive scenario
  • Competitive intensity forcing brands to pass on extra schemes to market

Strategic Initiatives

Channel Expansion

  • Moving from wholesale-driven market to secondary-driven market
  • Focus on LFS (Large Format Stores), e-commerce, and modern trade
  • Margin realization better in newer channels with less competition

Technology Implementation

  • Better implementation of SAP systems
  • AI initiatives for inventory management and stock visibility
  • DMS (Distribution Management System) implementation planned state-by-state
  • ARS (Automatic Replenishment System) in place but requires proper DMS first

Cost Optimization

  • Continuous process of efficiency improvement and productivity enhancement
  • Focus on better product mix, efficient channel management
  • Disciplined cost optimization initiatives

Return Ratios Discussion

  • Historical performance (2015-2022): Revenue growth 7%, EBITDA margin ~14%, Net margin ~7%, ROCE ~25%, ROE mid-teens
  • Current profile: Revenue growth ~10%, Operating margins ~10%, Net margin 5-6%, ROCE ~10%, ROE single digits
  • Management acknowledges current return ratios are not desirable
  • Initiatives focused on improving secondary market presence and newer channels expected to improve returns

Condolence Note

  • Mr. Ashok Bhandari, Non-Executive Independent Director, passed away on August 3, 2026
  • Associated with company since August 2018
  • Served as chairman of Audit Committee and Nomination and Remuneration Committee

Forward Guidance

  • Q2 FY27 revenue growth expected: 10-12%
  • Q2 FY27 EBITDA margin expected: 9-10%
  • Rationalization of advertisement spend to 6-7% from current 10.5%
  • Thermal segment expected to perform better than last year
  • Athleisure expecting double-digit growth annually
  • E-commerce expecting 20-25% growth