Soma Textiles Q1 FY26 Results (NSE: SOMATEX)
Signal: Growth reaccelerated
The read
Q1FY26 marks the second full quarter under the new highway works contract business. Revenue of ₹28.39 Cr shows scale is building after Q4's ₹50.82 Cr; however sequential decline of -44% QoQ indicates lumpy project execution. Operating margin at 8.3% (EBIT/revenue) is positive for the first time in this new business but well below typical construction margins, suggesting cost base is still settling. PAT fell 24% YoY purely because the prior year had a ₹2.26 Cr exceptional gain — stripping that, operating PAT was deeply negative a year ago vs ₹2.35 Cr now. The business model shift from textile trading to infrastructure works contract is the key inflection.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹0.28 Cr | +295.6% | -44.2% |
| EBIT | ₹0.02 Cr | -36.3% | |
| Net profit | ₹0.03 Cr | -24.0% | |
| EPS | ₹0.84 | -23.6% | |
| EBIT margin | 8.28% |
P&L walk
Revenue surged 13.8x YoY to ₹28.39 Cr driven by the highway works contract business; road work and site expenses consumed 90.7% of revenue, leaving a thin OPM of 8.3%. Other income fell from ₹4.30 Cr to ₹0.18 Cr, dragging total income. EBITDA margin improved to 8.3% as operating costs grew slower than revenue, but PAT declined 24% YoY as prior year's exceptional gain was not repeated. Depreciation and employee costs dropped sharply, reflecting the business model shift from textile trading to works contract.
Segments
Single reportable segment: highway works contract; no segment table provided.
Key positives
- Revenue of ₹28.39 Cr reflects successful transition to highway construction; YoY growth of 13.8x from prior textile trading revenue of ₹2.05 Cr.
- Operating profit (EBIT) positive at ₹2.35 Cr vs negative EBIT in most prior quarters; OPM turned positive for first time under new business.
- Finance cost negligible at ₹0.01 Cr, indicating zero debt operations.
Key concerns
- Sequential revenue decline of -44% QoQ from ₹50.82 Cr shows quarter-dependent project recognition; lumpy execution risk.
- Road work and site expenses at 90.7% of revenue leaves thin gross margin; EBITDA margin of 8.3% is low for construction sector.
- PAT fell 24% YoY driven by exceptional items base effect; excluding exceptionals, operating profit is still nascent.
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