Active Clothing Co. FY26: steady growth, higher PAT, and a retail pivot through NUEMO

Active Clothing Co. Limited closed FY26 with steady top line growth despite what management described as pricing pressure, volatile demand, and competitive market conditions in the textile and apparel industry. Total income rose to INR 318.31 crore in FY26 from INR 297.12 crore in FY25, a 7.13 percent year on year increase. EBITDA increased modestly to INR 29.39 crore from INR 28.49 crore. The bigger change was at the bottom line. Profit after tax grew 18.92 percent to INR 10.05 crore, and PAT margin improved to 3.16 percent from 2.84 percent.

In Q4 FY26, total income increased to INR 73.29 crore from INR 68.76 crore in Q4 FY25. EBITDA rose to INR 6.00 crore from INR 5.60 crore, with EBITDA margin largely stable at 8.18 percent. PAT, however, was flat at INR 1.62 crore versus INR 1.63 crore. The quarter captured the operating reality management pointed to: growth exists, but the environment remains competitive and cost pressures are present.

The operating model: integrated manufacturing plus distribution and retail

Active Clothing describes itself as an integrated apparel manufacturer offering end-to-end services across design, manufacturing, and retail. The core manufacturing portfolio includes flat-knitted sweaters, jackets, and circular-knitted t-shirts. The company has also added shoe uppers as a product category. Beyond manufacturing, the presentation outlines multi-brand distribution, go-to-market services for brands, and now an in-house multi-brand retail format under the NUEMO brand.

The company’s scale indicators in the presentation include a 2,300+ workforce, 2,30,000 sq ft of production area, and an overall annual apparel capacity of 46,50,000 units. It also highlights 30+ export countries and a dealer network of 200+ MBOs. For production capacity, the company discloses annual capacities and FY25 utilisation of roughly 75 percent across categories, including sweaters, jackets, t-shirts, and shoe uppers.

A notable aspect of the platform is the design and development capability. The presentation positions the design centre as supporting trend research, colour and yarn selection, and sample development, and it highlights virtual design development with 3D garment simulation and real-time modifications. This is framed as a way to reduce waste and accelerate development cycles.

Financial snapshot

The table shows a strong rebound from FY24 to FY25 and a more measured step up in FY26. The margin trend is also clear. EBITDA margin has softened in FY26 versus FY25, while PAT margin improved, helped by better performance below EBITDA including lower interest outgo in FY26.

What changed in FY26: PAT expansion, but working capital stayed heavy

Active Clothing’s FY26 profit growth outpaced revenue growth. EBITDA increased by 3.15 percent year on year, while PAT increased by 18.92 percent. Interest cost for the year reduced to INR 10.28 crore in FY26 from INR 11.36 crore in FY25, supporting the bottom line.

The balance sheet, however, continues to reflect a working-capital-heavy business. Inventory rose to INR 102.41 crore in FY26 from INR 86.69 crore in FY25. Trade receivables increased to INR 115.36 crore from INR 104.26 crore. Total assets grew to INR 305.28 crore from INR 279.11 crore.

Borrowings remained meaningful. Current borrowings were INR 92.87 crore in FY26 and non-current borrowings were INR 33.23 crore. Still, leverage metrics improved. Debt-to-equity reduced to 1.36x in FY26 from 1.53x in FY25, and interest coverage improved to 2.17x from 1.88x.

Cash flow performance improved sharply versus FY25. Cash from operations turned positive to INR 13.81 crore in FY26 compared with INR -10.37 crore in FY25. Net cash flow was INR 6.58 crore in FY26, and cash and bank balances rose to INR 6.82 crore at year end.

NUEMO: a multi-brand retail bet with quantified ambition

The strategic pivot in the presentation is the launch of NUEMO, described as a registered multi-brand retail vertical aimed at capturing apparel demand through flexible store formats. Management describes this as a scalable retail presence focused on underserved, high-growth markets and supported by technology-driven operations.

The quantified targets are specific. NUEMO is aiming for 2 lakh sq ft of retail space operational within four years and targets sales productivity of INR 1,200 per sq ft per month. Management also states a projected additional topline opportunity of approximately INR 200 to 250 crore within the next four years, subject to market conditions and execution performance.

The presentation lists multiple NUEMO store locations and sizes, indicating that execution has begun. However, no financial contribution from NUEMO is disclosed in the document. For investors, that distinction matters. The opportunity is clearly articulated, but the proof point will be store-level productivity and how quickly the new retail base scales without stretching working capital.

Alongside NUEMO, Active Clothing says it initiated fundraising of up to INR 23 crore through issuance of warrants during the quarter. Management states the proceeds will support expansion plans, strengthen working capital requirements, and enhance operational capabilities as the company scales.

Technology and capability upgrades: Knit to Shape and backward integration

The other major initiative is a partnership with Ning Bo Cixing to launch India’s first Knit to Shape smart knitting factory. The presentation states a long-term partnership and a plan to purchase 600 advanced machines. The stated objective is a next-generation facility integrating 3D seamless knitting, automation, and zero-waste production, which the company believes will enhance design flexibility, productivity, and sustainability.

The company also outlines backward integration efforts. It lists in-house capabilities such as printing, garment dyeing, dip dyeing, and specialized washes. The expected benefit in the presentation is reduced lead times and improved quality. In addition, it highlights premium product development through intricate hand and manual embroidery, and it notes leadership strengthening through appointments including a Production Director, a VP for Circular Knits and Soft Wovens, and senior heads for exports, sampling, and production.

On sustainability, the company states it installed rooftop solar panels with annual capacity to generate 500 kW, described as 50 percent of the required demand.

What management is aiming for next

The presentation sets ambitious medium-term revenue targets. The company states it aims to reach INR 500 crore revenue in the next three years and INR 1,000 crore in five years, driven by rising market demand. It also states an intention to expand the dealer network from 200 to 300.

These targets sit alongside the NUEMO ambition of an incremental INR 200 to 250 crore topline opportunity within four years. The presentation does not provide a segment revenue split or a bridge showing how much of future growth is expected from manufacturing versus distribution versus retail. That gap limits independent validation. Still, the document is clear about the strategic direction: expanding the platform from a design-and-manufacturing backbone into a wider retail footprint.

Takeaways

FY26 was a year of measured revenue growth and strong PAT expansion for Active Clothing, supported by lower interest costs and improved cash flow versus FY25. At the same time, the company remains working-capital intensive, and EBITDA margin softened in FY26 compared with FY25.

The next phase is being framed around two execution-heavy initiatives: NUEMO’s store rollout and productivity targets, and the technology-led Knit to Shape smart factory under the Ning Bo Cixing partnership. If these initiatives translate into visible revenue and cash flow traction while keeping leverage and working capital under control, they could become the defining levers of the company’s stated path toward INR 500 crore and INR 1,000 crore revenue milestones.