Ambika Cotton Q4 FY26 Results (NSE: AMBIKCO)
Signal: Margin pressure
The read
Q4FY26 revenue surged 57.9% YoY on volume recovery, but EBITDA margin contracted 322bps YoY due to ₹5.75 Cr forex loss (including ₹4.76 Cr MTM) and elevated other expenses. Full-year PAT grew only 8.9% as margin pressures persisted. The company announced a new ₹75 Cr plant modernisation (operational from Jan 2027), adding to open capex plans. Net cash position strengthened to ₹16,841 lakh from ₹8,719 lakh — debt-free balance sheet provides cushion.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹215.16 Cr | +57.9% | +23.5% |
| EBIT | ₹32.93 Cr | +51.1% | |
| Net profit | ₹24.53 Cr | +54.7% | |
| EPS | ₹42.85 | +54.7% | |
| EBIT margin | 15.3% |
P&L walk
Single-segment standalone entity; consolidated equals standalone.
Segments
Company operates only in one segment — Textiles; no segment split.
Key positives
- Revenue grew 57.9% YoY in Q4, the highest quarterly growth in at least 5 quarters, driven by volume recovery.
- Company debt-free with net cash of ₹16,841 lakh (₹168.4 Cr) — strong liquidity to fund capex.
- Full-year operating cash flow of ₹22,825 lakh (3.2x PAT) reflects strong working capital management and cash conversion.
- Final dividend of ₹37/share (370%) declared — yield 2.2% at CMP.
Key concerns
- EBITDA margin compressed 322bps YoY despite revenue surge — forex loss of ₹5.75 Cr (incl. ₹4.76 Cr MTM) in Q4 alone dragged profitability.
- Full-year PAT growth of only 8.9% — far below revenue growth — indicating structural margin pressure from forex, higher other expenses, and inventory holding costs.
- Inventory days at ~242 days (₹51,859 lakh) remain elevated, tying up capital despite strong receivables management.
- New ₹75 Cr modernization plan adds to previously announced ₹135 Cr Unit IV capex — total committed capex of ₹210 Cr could strain balance sheet if cash flow softens.
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