Release Date: November 15, 2025

Positive Points

• Rupa & Co Ltd (BOM:533552) recorded an 8% year-on-year revenue growth in Q2 FY26, driven by a robust 14% volume growth.

• The company saw a strong performance in exports, with a 28% year-on-year growth, contributing 4% to the revenues in the first half of FY26.

• Modern trade, including e-commerce, maintained steady momentum, contributing 8% to the actual revenues.

• The thermal wear segment showed a robust volume growth of approximately 20-24%, contributing 13% to the quarterly revenues.

• Rupa & Co Ltd (BOM:533552) generated an operating cash flow of 523 crores during the half-year, reflecting strong cash management.

Negative Points

• The EBITDA margin for the quarter decreased by 260 basis points year-on-year, primarily due to aggressive pricing strategies.

• Net profit margin for the quarter stood at 4.5%, down by 170 basis points year-on-year.

• The company faced intense competition, leading to a compromise on margins to maintain top-line growth.

• Working capital days for H1 FY26 were high at 235 days, with expectations to reduce slightly by year-end.

• The mid-premium segment trailed the economy segment in growth, indicating a need to reignite momentum in this area.

Q & A Highlights

Q: Why is there a sharp decline in the EBITDA margin despite an increase in revenue for the quarter? A: The decline in EBITDA margin is primarily due to a decrease in gross margin as the company adopted an aggressive pricing approach to remain competitive. This resulted in a dip of 140 basis points. Additionally, expenses for the quarter rose by 60 basis points, and other administrative expenses increased by another 60 basis points, leading to an overall 2.6% decrease in EBITDA margin. (CFO)

Q: Can you provide insights into the thermal performance and the order book for the same? A: This quarter showed robust growth in the thermal segment, with a volume increase of approximately 20-24%, contributing 13% to the revenue. We expect this positive trend to continue and potentially improve in the third quarter. (CFO)

Q: What are the future plans regarding capital expenditure (CapEx)? A: There are no major CapEx plans. We anticipate routine CapEx of 12 to 15 crores for FY26. (CFO)

Q: How do you plan to reignite momentum in the mid-premium and premium segments? A: We are increasing our marketing reach and strengthening our sales and marketing teams. We are also in the process of hiring a sales head to enhance our marketing activities for these segments. (CEO)

Q: How do you see modern trade and e-commerce scaling over the next 12 to 18 months? A: Modern trade is a key growth driver. We have appointed an e-commerce head and are expanding our presence on platforms like Amazon. We expect at least a 20% growth in this area. (CFO)