1. At a Glance
₹626 crore market cap. Stock chilling around ₹32.9. ROCE ~18%. ROE ~17%. Debt-to-equity a very polite 0.21. Quarterly sales up a loud 46% YoY, while profits grew a more disciplined 27% YoY. Iris Clothings is basically that kid in class who suddenly shot up in height, changed hairstyle, and now wants to sit on the front bench with Page Industries and Pearl Global—except the fees are high and the PE multiple is even higher.
This is a kidswear company selling clothes priced between ₹90 and ₹2,500, but the stock itself is dressed like a premium brand at ~44x earnings, well above industry PE of ~26. The latest quarter (Q3 FY26) delivered ₹48.7 Cr revenue and ₹3.01 Cr PAT, with margins cooling off slightly after a strong previous quarter. Capacity expansion, Disney-Marvel licensing, EBO rollouts, and a D2C dream are all in play.
But here’s the real question: is Iris growing sustainably… or just growing taller too fast for its bones?
2. Introduction
Iris Clothings has been around since 1956, which means this company is older than most portfolio managers pretending they “track consumption themes deeply.” Yet despite the vintage incorporation year, Iris behaved like a sleepy textile player for decades before waking up in the last few years and yelling: “Kidswear is the new alpha!”
The company operates under the DOREME brand, selling kids apparel from infants to 16-year-olds. Over the last five years, revenues have grown at ~19% CAGR and profits at ~27% CAGR. That’s solid. Not multibagger mania, but respectable, sweat-driven growth.
The last two years added spice:
- Rights issue of ~₹47.5 Cr
- 1:1 bonus issue
- Capacity expansion
- Disney & Marvel licensing
- Aggressive EBO plans
Basically, Iris went from “wholesale garment supplier” to “aspiring branded retail player” very quickly. And whenever a textile company discovers branding, the market immediately slaps a premium valuation… sometimes before execution catches up.
So are we looking at a
kidswear compounder in early innings—or a valuation wearing pants two sizes too big?
3. Business Model – WTF Do They Even Do?
Imagine explaining Iris Clothings to a tired investor at 11:47 PM.
Short version:
They design, stitch, brand, and sell kids clothes. That’s it. No metaverse. No AI-driven toddlers. Just clothes.
Longer version:
- Brand: DOREME
- Age group: 0–16 years
- Products: T-shirts, dresses, loungewear, hoodies, nightwear, accessories
- Premium angle: Disney & Marvel licensed apparel
- New categories: sportswear, innerwear, infant accessories
They manufacture in-house across 8 manufacturing + 2 dispatch units in Howrah, West Bengal, with 33,000 pieces/day capacity, moving to 40,000 pieces/day post capex.
Sales happen via:
- 173 distributors
- 10,000+ retailers
- Online marketplaces (Amazon, Flipkart, FirstCry, Hopscotch)
- Own D2C & B2B platforms
- Exclusive Brand Outlets (EBOs)
It’s vertically integrated, which helps margins—but also means inventory, working capital, and execution risk sit squarely on management’s shoulders.
Question for you:
👉 Does apparel branding excite you more than apparel manufacturing margins?
4. Financials Overview
Quarterly Comparison Table (₹ Crore)
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 48.67 | 33.38 | 44.32 | 45.8% | 9.8% |
| EBITDA | 6.03 | 6.04 | 7.03 | -0.2% | -14.2% |
| PAT | 3.01 | 2.37 | 4.12 | 27.0% | -26.9% |
| EPS (₹) | 0.16 | 0.12 | 0.22 | 33.3% | -27.3% |
Witty commentary:
Revenue sprinted. EBITDA tripped. PAT jogged. EPS slipped on a banana peel.
Margins compressed this quarter due to higher costs and normalization after a strong
