Sreeleathers Q1 FY27 Results (NSE: SREEL)
Signal: Margin expansion
The read
The key inflection is margin recovery: gross margin expanded 773bps YoY to 25.5% and EBITDA margin rose to 16.3% from the recent Q1FY26 trough, driving EBITDA up 120.2% and PAT up 138.6% on 19.7% revenue growth. The demand engine is broadening through accessories at 33.8% of sales, online revenue growing at a 103.3% four-year CAGR and the active franchise network growing 18.5% YoY, but the durability of the margin rebound remains the main thesis variable.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹59.63 Cr | 19.7% | N/A |
| EBIT | ₹9.38 Cr | 129.3% | |
| Net profit | ₹6.99 Cr | 138.6% | |
| EPS | ₹3.02 | 137.8% | |
| EBIT margin | 16.3% |
P&L walk
Standalone revenue increased 19.7% YoY to ₹59.63 Cr, while gross margin expanded 773bps to 25.5% and EBITDA rose 120.2% to ₹9.71 Cr; PAT increased 138.6% to ₹6.99 Cr, with the bottom line broadly tracking operating improvement rather than other income.
Key positives
- Gross margin increased 773bps YoY to 25.5%, returning to management's expected level of about 26%.
- EBITDA rose 120.2% YoY to ₹9.71 Cr on 19.7% revenue growth to ₹59.63 Cr, producing a 696bps expansion in EBITDA margin to 16.3%.
- Accessories reached a record 33.8% of Q1FY27 revenue, up from 29.5% of sales in FY22 and 32.9% in FY25.
- Online revenue has delivered a 103.3% four-year CAGR, while online revenue per unit is 45% above the company-wide average.
- The active franchised network grew 18.5% YoY, broadly in line with 19.7% revenue growth, while comparable-store sales and volumes remained positive in FY26.
- Management reported post-quarter COCO-store footfall up 17.4% versus the preceding 45-day period and 9.4% YoY, supporting its approximately 45% Q2FY27 sequential growth estimate.
Key concerns
- The filing does not disclose current-quarter volume growth or the specific cause of the 773bps gross-margin expansion, leaving the repeatability of the margin recovery unproven.
- Management's approximately 45% Q2FY27 sequential growth estimate is based on a limited 45-day footfall comparison and is explicitly forward-looking.
Research and educational content only. Not investment advice.