Active Clothing Co FY26: A ₹316 Cr Sweater-Maker, an 18.92% Profit Bump, and a Credit Rating That Stopped Answering the Phone

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1. At a Glance

Active Clothing Co closed FY26 with revenue of ₹316 crore and net profit of ₹10.05 crore, up 18.92% over FY25’s ₹8.45 crore. Over five years, profit has compounded at 178% and sales at 34% — the kind of numbers that arrive when a company climbs out of a ₹0.06 crore profit hole (that was FY21) and keeps climbing. The market currently pays about 19x those earnings, against an industry multiple near 25x.

Underneath the headline, the arithmetic gets more textured. Borrowings sit at ₹126 crore against a net worth of ₹93 crore. Receivables have swelled to ₹115 crore — more than a third of annual sales parked in other people’s payment cycles. And in November 2025, one of the two credit agencies rating the company’s ₹102 crore of bank facilities downgraded it and filed it under “Issuer Not Cooperating,” because the company reportedly stopped sending the information the rating needed.

So the record for FY26 holds two stories at once: a manufacturer scaling fast toward a stated ₹500 crore three-year target, and a balance sheet carrying the weight of that growth on borrowed money and stretched receivables. Both are true. Both are in the numbers.

2. Introduction

Active Clothing Co was incorporated in 2002 (the Mehra family ran it as a partnership from 1997) and listed on the BSE in March 2018. It sits in Mohali, Punjab, manufacturing readymade garments for global brands and distributing them domestically.

FY26 was a busy administrative year. The board approved a preferential issue of 20 lakh convertible warrants at ₹115 each to raise ₹23 crore, with promoters among the allottees. It announced NUEMO, a multi-brand retail platform targeting an additional ₹200–250 crore of topline within four years. It signed a partnership with China’s Ningbo Cixing to build a 600-machine “Knit to Shape” smart factory. And it fielded two separate GST matters, one of which it took to the High Court.

That’s a company doing several large things simultaneously while its profit base is still ₹10 crore. The sections that follow lay each of those out against the money that funds them.

Does a company earning ₹10 crore a year comfortably run a ₹23 crore fundraise, a ₹200 crore retail plan, and a multi-year machine program at once — or is sequencing the quiet risk here?

3. Business Model: WTF Do They Even Do?

Active is a “design-to-shelf” apparel manufacturer, which is a tidy way of saying it does the whole chain: trend forecasting, sampling, knitting, sewing, printing, embroidery, washing, and shipping — all from an integrated facility in Fatehgarh Sahib, Punjab, with a 500 KW rooftop solar array covering half its power.

The product list reads like a wardrobe inventory: flat-knitted sweaters (352 computerised machines from Shima Seiki, Stoll and Kauo Heng), jackets (500+ machines), circular-knitted T-shirts and sweatshirts, and shoe uppers for brands including Adidas. Installed capacity runs to 24 lakh sweaters, 10 lakh T-shirts, 5 lakh jackets, and 7.5 lakh shoe uppers annually, each running near 75% utilisation.

The customer roster is the real asset. A 22-year manufacturing relationship with Levi’s anchors it, alongside Tchibo, Bestseller, Skechers, Nike, and Arvind Fashions. Domestically, Active is the largest Levi’s marketing partner across Chandigarh, Punjab, J&K and Himachal, running 200+ multi-brand outlets and seven exclusive stores.

The model’s tell is in the margin structure. This is contract manufacturing for premium brands — Active makes the garment, the brand takes the leftover stock back, and margins are fixed year-on-year. That arrangement de-risks inventory but caps pricing power. It explains why a company selling to Levi’s and Adidas still runs an operating margin near 9%: the brand keeps the brand economics, and the maker keeps the making.

4. Financials Overview

Figures are consolidated, in ₹ crore.

Revenue grew 6.9% while operating profit held roughly flat, so the entire profit gain came from below the operating line — chiefly a fall in interest cost, from ₹11.36 crore to ₹10.28 crore, and a jump in other income from ₹0.97 crore to ₹1.87 crore. PAT rose faster than sales because the financing and non-operating lines moved in the company’s favour, not because the core business widened its spread.

Management, in its FY26 commentary, described the year as “steady progress despite continued challenges” across the textile