Kewal Kir.Cloth. Q2 FY27 Results (NSE: KKCL)
Signal: Margin expansion
The read
The key inflection is margin recovery: consolidated gross margin expanded 450bps YoY to 52.8% and EBITDA margin expanded 240bps to 23.3%, reversing the prior Q2FY26 margin contraction, while revenue growth moderated to +5.4% from +19.2% in Q1FY27.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹373 Cr | +5.4% | +33.7% |
| EBIT | ₹75 Cr | +11.9% | |
| Net profit | ₹54 Cr | +14.9% | |
| EPS | ₹7.84 | +7.5% | |
| EBIT margin | 23.3% |
P&L walk
Consolidated revenue increased to ₹373 Cr, +5.4% YoY and +33.7% QoQ, while gross margin expanded to 52.8% from 48.3% and EBITDA margin to 23.3% from 20.9%; PAT rose to ₹54 Cr, +14.9% YoY, helped by operating improvement rather than exceptional items.
Segments
No reportable segment table was provided; however, consolidated revenue of ₹373 Cr and PAT of ₹54 Cr materially exceeded standalone revenue of ₹290 Cr and PAT of ₹43 Cr, indicating a meaningful subsidiary contribution to group earnings.
Key positives
- Consolidated gross margin expanded 450bps YoY to 52.8% as raw-material cost fell to 51.2% of revenue from 55.1%; the filing does not identify whether this was driven by input costs, pricing or mix.
- EBITDA rose to ₹87 Cr from ₹74 Cr YoY and EBITDA margin expanded 240bps to 23.3%, despite revenue growth moderating to +5.4%.
- H1 operating cash flow increased to ₹128 Cr from ₹98 Cr, exceeding H1 consolidated PAT of ₹94 Cr and providing a favorable cash-conversion signal.
- Consolidated PAT of ₹54 Cr was 14.9% higher YoY, with finance cost declining 25.0% to ₹3 Cr.
Key concerns
- Revenue growth moderated to +5.4% YoY from +19.2% in Q1FY27, despite the sequential rebound from ₹279 Cr to ₹373 Cr.
- Standalone PAT was flat YoY at ₹43 Cr, while consolidated PAT rose 14.9% to ₹54 Cr, increasing reliance on subsidiary earnings for group-level growth.
- Inventory increased to ₹272 Cr from ₹258 Cr and trade receivables to ₹406 Cr from ₹321 Cr at FY26 year-end; the filing does not provide days metrics.
- EPS growth of 7.5% lagged total PAT growth of 14.9% because non-controlling interest increased to ₹5 Cr from ₹2 Cr.
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