Active Clothing Co. Limited: Weaving Growth and Innovation in a Dynamic Market

Active Clothing Co. Limited, a prominent integrated apparel manufacturer based in Mohali, Punjab, has reported a steady performance for Q2 and H1 FY2026, demonstrating resilience amidst evolving market dynamics. The company, specializing in flat-knitted sweaters, jackets, and circular-knitted t-shirts, continues to leverage its 'design-to-shelf' model and strong global brand partnerships. For Q2 FY26, the company recorded a total income of Rs. 83.19 Crore. The first half of the financial year, H1 FY26, saw a total income of Rs. 147.66 Crore, marking a robust 15.22% year-on-year growth. While EBITDA margins experienced a slight dip in Q2, management remains focused on operational discipline, product quality, and timely execution, reinforcing its long-term growth trajectory.

The company's performance in Q2 was influenced by a softer demand environment and fluctuations in the American market, which led to increased competition as players sought alternative avenues. Despite these external headwinds, Active Clothing managed to maintain stability across key categories. The management highlighted that employee benefit expenses increased by 8% year-on-year, primarily due to the need to retain skilled personnel for ongoing expansion plans and inflationary pressures on wages. This incremental cost is viewed as a temporary effect that is expected to be absorbed as manufacturing operations scale up and market conditions improve.

Strategic Initiatives and Future Outlook

Active Clothing is making significant strides in modernizing its operations and expanding its market reach. A cornerstone of its strategy is the agreement to establish India's first 'Knit to Shape' Smart Knitting Factory. This involves a long-term partnership with Ningbo Shipping Company Limited, the world's largest manufacturer of computerized flat knitting machines, to acquire 600 advanced units. This next-generation facility will integrate 3D seamless knitting, automation, and zero-waste production, enhancing design flexibility, productivity, and sustainability. The first phase of this project is slated for the end of H1 FY2026-2027, with 100 machines being installed every six months over a three-year period. This initiative is expected to significantly boost the company's capabilities, particularly in the sweater vertical, and contribute to a total company revenue of approximately Rs. 700 Crore upon full completion. Notably, the machinery will be funded by the supplier with a five-year deferred payment plan, mitigating immediate capital expenditure concerns.

Beyond this, the company is actively pursuing infrastructure enhancement and capacity expansion across all verticals to meet rising demand. This includes additional land acquisition and a planned incremental capex of Rs. 60 Crore, which is currently in process and expected to yield results by winter 2026. Active Clothing aims to achieve a revenue of ₹500 Crore in the next three years and ₹1,000 Crore in five years. The company is also expanding its dealer base from the current 200 to 300, strengthening its distribution network. Furthermore, Active Clothing has bolstered its supply chain through backward integration, establishing in-house capabilities for printing, garment dyeing, and specialized washes, which reduces lead times and improves quality. The company has also developed in-house expertise in intricate hand and manual embroideries, enabling it to offer high-value, premium products.

Market Position and Sustainability Focus

Active Clothing Co. Limited has solidified its position as a preferred manufacturing partner for global high-fashion streetwear and established international brands. Its long-standing relationship with Levi's, spanning 22 years, exemplifies its reliability and quality. The company also partners with other major brands like Adidas, Bestseller, and Tchibo, supplying to 38 countries globally. This diversification helps mitigate risks associated with market concentration. The company's commitment to sustainability is evident through its integrated approach, which includes renewable energy adoption, responsible sourcing, and compliance with leading global standards such as RAP, GOTS, SEDEX, SA8000, GRS, and Higg Index. A significant step in this direction is the installation of a rooftop solar panel with an annual capacity of 500 KW, meeting 50% of its energy requirements.

Concluding Thoughts: A Future Woven with Innovation

Active Clothing Co. Limited is strategically navigating a dynamic global apparel market by focusing on innovation, efficiency, and sustainable growth. Despite external challenges, the company's proactive investments in advanced manufacturing technologies, capacity expansion, and market diversification underscore its commitment to delivering sustained value to all stakeholders. The management's emphasis on strengthening design capabilities, deepening customer relationships, and driving technology-led improvements positions Active Clothing as a resilient player poised for continued success in the evolving fashion industry. The recent Crisil ratings, affirming financial discipline, further bolster investor confidence in the company's robust operational and financial health.