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1. Opening Hook
Revenue climbed ₹372 Cr, a tidy 8% bump. Profit, meanwhile, fell to ₹11 Cr—a 75% crater. The culprit wasn’t demand; it was US tariffs, raw material spikes, and a gratuity reset that arrived like a surprise guest who eats the whole fridge. Management nodded to this with a neat hypothetical: strip out the drags and normalized pre-tax would’ve been ₹32 Cr. The market, though, doesn’t grade on a curve.
2. At a Glance
- Revenue: ₹372 Cr, +8% YoY — growth showed up; profitability did not.
- PAT: ₹11 Cr, down 75% YoY — tariff discounting (₹20 Cr hit), chargebacks (₹8 Cr), and forex MTM losses (₹2.3 Cr) flattened earnings.
- EBITDA margin: ~7.43% (FY26) vs ~19% (FY25) — the “phenomenal” year was pre-tariff; this one is post-tariff arithmetic.
- Home textiles mix: 52% of sales — down sharply on realized pricing; greige fabrics held 48%.
- Quince volumes: +15% FY26, +15–20% expected FY27 — order backlog at ₹6.5 Cr (or “roughly 6 million”); price realization still under negotiation.
- FY27 guidance: +12–14% topline, EBITDA margin 10–11% — conservative, tariff-dependent, and assumes no further shocks.
3. Management’s Key Commentary
On the tariff trap:
“About 18% discount on the goods sold to the customer in the US… translates to 20 CR.”
(Translation: A ₹20 Cr discount because the US decided tariffs were everybody’s problem. The effective discount was 18%. Management was still paying it, even though tariffs fell to 10%, because renegotiation is a 17-step dance with your largest customer.)
“Tariffs have now come down to 10%, and our discount still remains at 18… we are trying to negotiate that down.”
(Translation: Negotiation is ongoing. The word “trying” does heavy lifting here.)
On raw material inflation:
“Raw material… greige fabric and cotton yarn, went up by 15% because of the war; New York cotton futures… 78 cents… from 70.”
(Translation: Geopolitics hit cotton prices. The company couldn’t pass all of it on.)
“Chargeback… about 8 crores.”
(Translation: On top of the 18% discount, the customer also deducted ₹8 Cr for its own cost pressures. Structural margin compression, one invoice at a time.)
On the “normalized” earnings frame:
“We could have attained a profit before tax of 32 crores.”
(Translation: If tariffs, discounts, chargebacks, gratuity resets, and forex losses didn’t exist, we’d have ₹32 Cr PBT. Hypotheticals are free; actual margin recovery is being negotiated.)
On home textile margins and the commoditization trap:
“Growth… in the past two years… because of the Home Textile division’s margin.”
(Translation: FY25’s 19% EBITDA was riding home textile upside. Now the division is being crushed.)
“Value-added items… top-of-bed… design-forward items [higher margin]. Commoditized items [lower margin]. Last year, it was approximately 50% of commodity.”
(Translation: Half the made-ups book is low-margin commodity stuff. Pricing power exists only on design-forward SKUs. Every customer conversation starts with “what’s the cheaper version?”)
On Quince negotiations:
“We have spoken to the customer… long calls with the CEO… in one or two products, we have got a slight increase in price… [expected] this quarter onwards.”
(Translation: After weeks of calls, a “slight increase” on “one or two products” is the win. Everything else is still being “discussed.”)
“Negotiations are going on right now… [the customer is] a lot more price sensitive post tariff + macro shocks.”
(Translation: Macro shock = customer learned tariffs are recoverable from vendors. Price sensitivity will persist.)
On inventory and working capital:
“Our business model is as such, where you’re expected to have inventory of certain items.”
(Translation: Inventory at 237 days is high, but we need it. See also: the next sentence.)
“Improving… lean management… going more just in time… hired a good industrial engineering consultant… revamping some of our lines… aimed to come back to the previous
