1. Opening Hook

While everyone else is busy debating China+1, Active Clothing decided to go Machine+600. In a quarter where margins sulked, tariffs screamed, and the US market played hard to get, management calmly announced India’s first knit-to-shape smart factory. Because when the market gets tough, the tough apparently order 600 knitting machines on deferred payment.

Q2 wasn’t glamorous—margins slipped, growth slowed, and America kept sulking. But beneath the surface, Active Clothing quietly laid the foundation for a very different future: automation-heavy, labour-light, waste-light, and ambition-heavy.

This concall wasn’t about Q2 pain. It was about FY28 dreams, ₹700 crore revenue visions, and sweaters made by robots instead of people.

Read on. The short-term looks messy. The long-term looks… knitted to perfection.

2. At a Glance

• Q2 Revenue ₹83.2 Cr – Growth crawled, blame America’s tariff tantrums.
• H1 Revenue ₹147.7 Cr (+15.2%) – Still growing, just not sprinting.
• EBITDA Margin 8.9% (Q2) – Machines not installed yet, costs already here.
• PAT Margin ~3.3% – Apparel math doing apparel things.
• Operating Cash Flow ₹8.16 Cr – Finally some cash behaving well.
• 600 Smart Machines Announced – Management basically said: “Trust the robots.”

3. Management’s Key Commentary

“We are into international markets, mainly affected by the American scenario.”
(Translation: US sneezed, everyone caught a cold.) 😐

“With knit-to-shape machines, margins will definitely improve.”
(Robots don’t ask for increments.) 🤖

“Market is very stable for raw materials.”
(At least cotton isn’t misbehaving.)

“We will cross ₹100 crore export revenue this year.”
(Exports are alive, just slightly jet-lagged.)

“We are not manufacturing a single garment without an order.”
(Inventory risk politely shown the exit.) 😏

“Once all machines are installed, revenue can reach ₹700 crore.”
(Three years, 600 machines, zero chill.)

4. Numbers Decoded

Decode: Growth is real, margins are waiting for machines to arrive.

5. Analyst Questions (Decoded)

• Why did margins fall?
  Tariffs, competition, and capacity built ahead of demand.
• Will smart knitting improve margins?
  Yes, once machines stop being PowerPoint slides.
• Is the US market hurting business badly?
  Plans slowed, not derailed.
• Are new brands coming?
  Audits ongoing—Primark, M&S knocking.