Dollar Industries Weaves a Stronger Future: Q2 & H1 FY26 Performance Highlights

Dollar Industries Limited, a prominent name in India's hosiery and garment sector, has reported a robust financial performance for the second quarter and first half of the fiscal year 2025-26. The company's Q2 FY26 operating income surged by 5.6% year-on-year to Rs. 471.9 crores, driven by consistent demand across its diverse product categories. This growth trajectory was further amplified by a significant 23.3% year-on-year increase in operating EBITDA, reaching Rs. 60.3 crores, with margins expanding notably by 183 basis points to 12.8%. The company's profit after tax (PAT) also saw a substantial rise of 32.7% year-on-year, totaling Rs. 35.2 crores, with PAT margins improving to 7.4%. These figures underscore Dollar Industries' strategic progress and operational efficiency in a dynamic market.

The first half of FY26 also reflects this positive momentum, with operating income growing 11.6% year-on-year to Rs. 871 crores. Operating EBITDA for H1 FY26 increased by 22.1% to Rs. 103.2 crores, and PAT stood at Rs. 56.5 crores, marking a strong 35.1% growth over the previous year. This consistent performance is a testament to the company's ability to leverage operating efficiencies and a favorable product mix.

Strategic Consolidation and Operational Excellence

A key highlight of the quarter is the proposed merger of nine promoter group companies into Dollar Industries Limited. This strategic move aims to consolidate brand ownership, manufacturing units, and real estate under a single listed entity, enhancing governance, operational control, and efficiency. A significant benefit of this merger is the direct transfer of the 'Dollar' brand ownership to the company, providing complete control over a core asset and eliminating potential conflicts of interest. This consolidation is expected to strengthen market presence, drive product innovation, and deepen stakeholder trust, while also yielding cost savings in areas like rent, compliance, employee expenses, and royalties.

Dollar Industries has also demonstrated disciplined cost management, particularly in advertisement spending. The company successfully curtailed its advertisement expenses to 6.2% of operating income in H1 FY26, a reduction from 7.2% in H1 FY25, with further reductions planned. This focus on cost optimization, alongside the benefits from its new spinning unit, has contributed to improved gross margins and overall profitability.

Market Dynamics and Distribution Growth

The company's product categories continue to show resilient momentum. The thermals segment, a key winter essential, delivered a standout performance with 23.5% value and 28.1% volume growth year-on-year, supported by early-season demand. Force NXT, the premium innerwear line, sustained its growth trajectory with 6% value and 19.2% volume growth, reflecting a rising consumer preference for high-quality products. The Champion kids' range also posted exceptional gains, with 109.4% value and 73.9% volume growth.

On the distribution front, Dollar Industries is strengthening its presence across modern trade, e-commerce, and quick commerce channels, which collectively contributed 10.2% of total sales during the quarter. Quick commerce, despite its relatively small base, scaled sharply to contribute 4.0% to overall sales, highlighting its increasing significance in the company's retail mix. The company's 'Project Lakshya' initiative, aimed at reinventing the distribution model, continues to progress, albeit with a cautious approach due to intensified market competition. This project focuses on a demand-pull environment, leading to increased market penetration and improved working capital for distributors.

Financial Summary

Outlook and Future Focus

Dollar Industries remains committed to driving growth through stronger brand ownership, operational excellence, and deeper channel integration. The company aims for an EBITDA target of 12%-13% for the current fiscal year, with a long-term goal of 14% within a couple of years. Revenue growth is projected at 11%-12% for the current fiscal, primarily driven by volume. Management is also focused on maintaining working capital discipline, with a comfortable net debt to equity ratio of 0.36 and a target to reduce net debt by Rs. 40-50 crores. The cash conversion cycle is expected to improve by 10-15 days by fiscal year-end.

With a clear strategic roadmap, robust financial health, and a proactive approach to market challenges, Dollar Industries Limited is well-positioned for sustained value creation and long-term success. The company's focus on premiumization, digital expansion, and integrated manufacturing capabilities underpins its confidence in achieving future growth and enhancing stakeholder trust.