Flair Q2 revenue rose 6% while EBITDA declined 16% year on year

Flair Writing Industries Limited reported Q2 FY27 consolidated revenue of Rs 340.1 crore, up 6.0% year on year, but earnings before interest, tax, depreciation and amortisation (EBITDA) declined 16.2% to Rs 50.6 crore as EBITDA margin narrowed to 14.9% from 18.8% in Q2 FY26.

What did Flair report in Q2 FY27?

Flair reported revenue from operations of Rs 340.1 crore in Q2 FY27, compared with Rs 320.9 crore in Q2 FY26. Gross profit was Rs 165.7 crore, marginally below Rs 166.6 crore a year earlier. Profit after tax (PAT) declined 25.8% to Rs 31.7 crore from Rs 42.7 crore, meaning sales growth did not translate into higher reported profit on a year-on-year basis.

The quarter-on-quarter comparison was more mixed. Revenue rose 6.5% from Rs 319.2 crore in Q1 FY27 and gross profit increased 4.5% from Rs 158.6 crore. EBITDA, however, fell 5.2% from Rs 53.3 crore, while PAT rose 9.1% from Rs 29.1 crore.

Why did Flair’s margins decline in Q2 FY27?

Flair’s gross profit margin fell to 48.7% in Q2 FY27 from 51.9% in Q2 FY26, a reduction of 3.2 percentage points. EBITDA margin declined by 3.9 percentage points to 14.9% from 18.8%, while PAT margin decreased by 4.0 percentage points to 9.3% from 13.3%. The release does not give a specific reason for the year-on-year margin changes.

Sequentially, gross profit margin was also lower than the 49.7% reported in Q1 FY27, and EBITDA margin declined from 16.7%. PAT margin moved higher to 9.3% from 9.1%, consistent with the increase in PAT to Rs 31.7 crore from Rs 29.1 crore despite the reduction in EBITDA.

The first-half result showed a similar pattern. H1 FY27 revenue grew 8.2% to Rs 659.4 crore from Rs 609.5 crore in H1 FY26, while EBITDA fell 5.5% to Rs 103.9 crore from Rs 109.9 crore. EBITDA margin was 15.8%, against 18.0% a year earlier, and PAT declined 15.2% to Rs 60.8 crore.

Which businesses supported Flair’s Q2 sales growth?

Flair’s domestic sales were Rs 292 crore in Q2 FY27, up 5.5% quarter on quarter from Rs 276 crore in Q1 FY27. Export sales were Rs 49 crore and increased 13.0% quarter on quarter. The company attributed the 6.5% sequential consolidated revenue increase to sustained growth across key domestic-market business segments.

For H1 FY27, domestic sales increased 10.8% year on year to Rs 568 crore from Rs 513 crore in H1 FY26. Managing Director Valimchand Rathod said Writing Instruments grew 7% in the half year, primarily driven by the domestic market, while Creative Products grew 24% year on year, supported by demand and new stock-keeping unit launches.

The Creative segment grew 10% quarter on quarter in Q2 FY27 despite an average 15-day manufacturing disruption at Flair’s Valsad and Daman facilities. Flair said continued portfolio expansion and enhanced manufacturing capabilities supported the segment, although the release does not disclose Creative revenue, profit or its share of consolidated sales.

What capacity additions is Flair planning?

Flair expects its new Creative manufacturing line at Valsad to become partially operational in Q3 FY27, with ramp-up planned progressively over subsequent quarters. Management said the addition is intended to support manufacturing capability and portfolio expansion, but did not disclose its capacity, capital expenditure or revenue contribution.

Flair Cyrosil Industries Private Limited, a Flair subsidiary, is targeting operationalisation of its fourth stainless-steel bottle manufacturing line by Q4 FY27. Flair also said commercial operations for the new fourth Steel Bottles line are expected to begin in Q4 FY27, positioning Creative Products and Steel Bottles and Houseware as diversification areas beyond Writing Instruments.

The board approved an interim dividend of 10%, amounting to 50 paisa per share. Flair sells products under the Flair, Flair Creative, Hauser, Pierre Cardin and ZOOX brands, but the release does not provide segmental sales or margins for the brands, Steel Bottles and Houseware, or the MOP distribution business.

Conclusion

Flair’s Q2 FY27 figures show that revenue growth was accompanied by lower gross profit, EBITDA and PAT than a year earlier. The same relationship appeared in H1 FY27, when revenue increased 8.2% but EBITDA and PAT fell, alongside lower EBITDA and PAT margins.

The disclosed milestones to watch are partial commissioning of the Valsad Creative line in Q3 FY27 and the targeted Q4 FY27 operationalisation of the fourth stainless-steel bottle line. Management’s plans make subsequent progress in Creative Products, Steel Bottles and Houseware, as well as the direction of gross and EBITDA margins, relevant measures of the diversification strategy.