Aarnav Fashions Q2 Profit Falls 30% as Revenue Declines

AARNAV FASHIONS LIMITED reported net profit of Rs 1.65 crore for the quarter ended September 30, 2026, down 30.3% from Rs 2.37 crore a year earlier, as revenue from operations declined 4.1% to Rs 128.37 crore and profit before tax fell to Rs 2.18 crore from Rs 3.17 crore.

Why did Aarnav Fashions’ September-quarter profit fall?

Aarnav Fashions’ net profit fell because total income declined while the expense base took a larger share of income. Total income for the quarter ended September 30, 2026 was Rs 128.45 crore, down from Rs 133.94 crore in the corresponding quarter of 2025, while total expenses declined to Rs 126.27 crore from Rs 130.78 crore.

Profit before tax declined 31.2% to Rs 2.18 crore from Rs 3.17 crore, and net profit declined by Rs 0.72 crore to Rs 1.65 crore. Current tax was Rs 0.75 crore, compared with Rs 0.96 crore a year earlier, while the deferred-tax credit was Rs 0.23 crore versus Rs 0.17 crore. Basic and diluted earnings per share were Rs 0.39, against Rs 0.56 in the year-earlier quarter.

How did Aarnav Fashions’ margins change in Q2?

Aarnav Fashions’ net profit margin narrowed to about 1.3% in the September 2026 quarter from about 1.8% a year earlier, based on reported net profit and revenue from operations. Its profit-before-tax margin also declined to about 1.7% from about 2.4%, as the Rs 0.99 crore fall in pre-tax profit exceeded the decline in revenue proportionately.

Total expenses represented about 98.3% of total income in the September 2026 quarter, compared with about 97.6% in the September 2025 quarter. The filing reports no exceptional items in either quarter, so the reported difference between income and expenses was reflected directly in profit before tax of Rs 2.18 crore and Rs 3.17 crore, respectively.

Material consumption rose 20.4% year on year to Rs 94.59 crore from Rs 78.55 crore despite the revenue decline. Purchases of stock-in-trade fell to Rs 6.13 crore from Rs 15.43 crore, other expenses fell to Rs 19.32 crore from Rs 23.32 crore, and the inventory-change line was a Rs 1.21 crore credit compared with a Rs 6.84 crore expense a year earlier.

How did Aarnav Fashions perform against the June quarter and first half?

Aarnav Fashions’ revenue from operations rose 48.3% sequentially from Rs 86.53 crore in the quarter ended June 30, 2026 to Rs 128.37 crore in the September quarter. Net profit, however, slipped 1.7% from Rs 1.68 crore, while profit before tax decreased 3.5% from Rs 2.26 crore to Rs 2.18 crore.

Cost of materials consumed increased by Rs 27.74 crore sequentially to Rs 94.59 crore, while other expenses increased by Rs 5.12 crore to Rs 19.32 crore. Finance costs declined slightly to Rs 2.52 crore from Rs 2.57 crore, but depreciation and amortisation rose to Rs 2.59 crore from Rs 1.95 crore.

For the six months ended September 30, 2026, Aarnav Fashions reported revenue from operations of Rs 214.89 crore, compared with Rs 230.96 crore in the prior corresponding half-year. Net profit for the six-month period fell to Rs 3.33 crore from Rs 4.26 crore, while basic earnings per share declined to Rs 0.79 from Rs 1.01. The company operates in one segment, textile processing.

What changed in Aarnav Fashions’ balance sheet and cash flow?

Aarnav Fashions’ total assets stood at Rs 463.14 crore at September 30, 2026, compared with Rs 398.08 crore at March 31, 2026. Current assets increased to Rs 332.65 crore from Rs 266.41 crore, including inventories of Rs 135.60 crore and trade receivables of Rs 155.99 crore.

Inventories increased by Rs 38.91 crore from Rs 96.69 crore at March 31, while trade receivables rose by Rs 25.01 crore from Rs 130.98 crore. Cash and cash equivalents declined to Rs 3.70 crore from Rs 4.19 crore, while bank balances other than cash equivalents increased to Rs 3.75 crore from Rs 3.68 crore.

Total equity was Rs 199.92 crore at September 30, 2026, compared with Rs 196.58 crore at March 31, while total liabilities rose to Rs 263.22 crore from Rs 201.50 crore. Non-current borrowings increased to Rs 28.62 crore from Rs 14.32 crore, and current borrowings were Rs 94.87 crore compared with Rs 94.48 crore.

Aarnav Fashions used Rs 6.54 crore in operating activities during the six months ended September 30, 2026, compared with Rs 21.45 crore generated from operations in the year ended March 31, 2026. The half-year operating outflow included increases of Rs 38.91 crore in inventory and Rs 25.01 crore in trade receivables, partly offset by a Rs 43.26 crore increase in trade payables.

What did the limited review report say?

Nahta Jain & Associates stated in its limited review report dated November 3, 2026 that nothing had come to its attention suggesting that Aarnav Fashions’ unaudited standalone results were not prepared in accordance with applicable Indian Accounting Standards, or Ind AS, or contained a material misstatement. The report covered the quarter ended September 30, 2026 and the six months from April 1, 2026 to September 30, 2026.

The auditor said it conducted the review under Standard on Review Engagements 2410, which requires moderate assurance. It also stated that a review is limited mainly to enquiries and analytical procedures, provides less assurance than an audit, and does not result in an audit opinion.

Conclusion

The September 2026 results show that Aarnav Fashions’ 4.1% decline in quarterly revenue was accompanied by a 30.3% reduction in net profit to Rs 1.65 crore. For the six months ended September 30, 2026, revenue was Rs 214.89 crore and net profit was Rs 3.33 crore, while inventories and trade receivables together increased by Rs 63.92 crore from March 31, 2026.

The disclosed matter to watch is Aarnav Fashions’ assessment of the Code of Social Security, 2020 and the Industrial Relations Code, 2020, along with related rules. The company said no effect had been recognised in the September 30, 2026 financial statements because evaluation of the full impact and operational implementation of applicable provisions remains pending.