Flair Q2 revenue rises 6% while EBITDA declines 16.2%

In Q2 FY27, Flair Writing Industries Limited reported revenue growth of 6.0% year on year to Rs 340.1 crore, but earnings before interest, tax, depreciation and amortisation (EBITDA) fell 16.2% to Rs 50.6 crore as gross margin declined to 48.7% from 51.9% and floods disrupted output at Daman and Valsad facilities.

Why did Flair’s Q2 EBITDA decline despite revenue growth?

Flair’s Q2 FY27 EBITDA declined because revenue growth did not convert into gross-profit growth and operating expenses increased. Revenue from operations rose by Rs 19.2 crore to Rs 340.1 crore from Rs 320.9 crore in Q2 FY26, while gross profit edged down 0.5% to Rs 165.7 crore from Rs 166.6 crore. Gross margin consequently declined by 3.2 percentage points to 48.7%.

Material consumption rose to Rs 174.4 crore in Q2 FY27 from Rs 154.3 crore a year earlier, employee benefits expense increased to Rs 59.5 crore from Rs 56.3 crore, and other expenses reached Rs 55.6 crore from Rs 49.9 crore. EBITDA margin was therefore 14.9%, compared with 18.8% in Q2 FY26 and 16.7% in Q1 FY27.

Profit after tax (PAT) was Rs 31.7 crore, down 25.8% from Rs 42.7 crore in Q2 FY26 but up 9.1% from Rs 29.1 crore in Q1 FY27. The sequential PAT increase accompanied 6.5% quarter-on-quarter revenue growth, although EBITDA remained 5.2% below Q1 FY27 and earnings before interest and tax (EBIT) were 21.8% lower year on year at Rs 43.6 crore.

Which segments drove Flair’s Q2 FY27 revenue?

Flair’s Pens and Creative segments increased sequential revenue in Q2 FY27, while Steel Bottles and Houseware declined after flooding at the Valsad facility. Pens revenue increased 5% quarter on quarter to Rs 231 crore from Rs 220 crore in Q1 FY27, despite global disruption affecting exports. Pens represented 68% of Q2 revenue mix, compared with 69% in the preceding quarter.

Creative revenue rose 10% sequentially to Rs 88 crore from Rs 80 crore, increasing its revenue mix to 27% from 25%. Flair said this growth was lower than expected because floods temporarily disrupted manufacturing at Daman and Valsad. Steel Bottles and Houseware revenue, in contrast, declined 20% to Rs 16 crore from Rs 19 crore, reducing its mix to 5% from 6%; Flair said the Valsad disruption had been brought back to normalcy.

The H1 FY27 segment results show faster growth in Creative than in the other categories. Creative revenue rose 24% year on year to Rs 168 crore from Rs 135 crore, supported by domestic demand and new stock-keeping unit launches. Pens revenue increased 7% to Rs 451 crore from Rs 423 crore, while Steel Bottles and Houseware revenue declined 9% to Rs 35 crore from Rs 38 crore after the Q2 disruption offset 54% year-on-year growth reported in Q1 FY27.

How did Flair’s domestic and export sales change?

Flair’s domestic sales increased in both Q2 and H1 FY27, whereas exports rose sequentially in the quarter but remained below the prior-year half-year level. Domestic sales grew 6% quarter on quarter to Rs 292 crore in Q2 FY27 from Rs 276 crore in Q1 FY27. For H1 FY27, domestic sales were Rs 568 crore, up 11% from Rs 513 crore in H1 FY26.

Exports rose 13% sequentially to Rs 49 crore in Q2 FY27 from Rs 43 crore in Q1 FY27, but H1 FY27 exports declined 5% year on year to Rs 92 crore from Rs 97 crore. Within Pens, Flair attributed largely flat export sales in H1 FY27 to the West Asian Crisis, while identifying domestic-market performance as the main driver of the segment’s 7% half-year growth.

Flair’s longer-term mix shows a rising domestic contribution. Domestic sales accounted for 84% of total FY26 revenue of Rs 1,250 crore, compared with 80% of Rs 943 crore in FY23, while export share fell to 16% from 20%. In Q2 FY27, domestic growth coincided with 5% Pens growth and 10% Creative growth, but consolidated gross margin still declined to 48.7%.

What do Flair’s H1 FY27 results and balance sheet show?

Flair’s H1 FY27 revenue rose 8.2% to Rs 659.4 crore, but EBITDA and PAT were below the previous year as margins contracted. Gross profit increased 4.3% to Rs 324.2 crore from Rs 310.8 crore, although gross margin declined to 49.2% from 51.0%. EBITDA fell 5.5% to Rs 103.9 crore and PAT declined 15.2% to Rs 60.8 crore, with PAT margin at 9.2% versus 11.8% in H1 FY26.

At September 2026, total assets were Rs 1,475.8 crore, compared with Rs 1,369.8 crore at March 2026. Inventories rose to Rs 393.3 crore from Rs 354.0 crore and trade receivables increased to Rs 331.5 crore from Rs 273.4 crore. Cash generated from operations was Rs 51.0 crore in H1 FY27, down from Rs 77.8 crore in September 2025, while cash and cash equivalents ended at Rs 1.3 crore versus Rs 36.8 crore a year earlier.

Flair expects commercial operations for its fourth Steel Bottles line to begin in Q4 FY27. Property, plant and equipment stood at Rs 479.5 crore in September 2026, up from Rs 454.3 crore in March 2026, while capital work-in-progress declined to Rs 34.4 crore from Rs 60.0 crore. The presentation does not quantify the capacity, revenue, margin or cash-flow contribution expected from the fourth line.

Conclusion

Flair’s Q2 FY27 results show that 6.0% year-on-year revenue growth to Rs 340.1 crore did not offset margin pressure and higher costs. Sequential gains in Pens, Creative and domestic sales supported turnover, but gross margin fell 3.2 percentage points, EBITDA declined 16.2% to Rs 50.6 crore, and PAT fell 25.8% to Rs 31.7 crore.

The next disclosed milestone is the expected Q4 FY27 commercial start of the fourth Steel Bottles line. Results after Q2 will also indicate whether production normalisation at Daman and Valsad supports Creative and Steel Bottles revenue, and whether gross margin improves from the 48.7% reported in Q2 FY27.