GHCL Textiles adjusted Q2 PAT rose 249% despite fire loss

GHCL Textiles reported adjusted profit after tax of Rs 56 crore in Q2 FY27, 249% above Q2 FY26, as earnings before interest, tax, depreciation and amortisation reached Rs 92 crore; a Rs 27 crore godown-fire loss reduced reported profit after tax to Rs 36 crore.

Why did GHCL Textiles' adjusted Q2 profit rise?

GHCL Textiles' adjusted profit rose because total income grew faster than operating expenses in Q2 FY27. Total income increased 31% year on year to Rs 446 crore from Rs 339 crore, while operating expenses rose 18% to Rs 354 crore from Rs 301 crore. EBITDA consequently increased 141% to Rs 92 crore from Rs 38 crore.

EBITDA margin rose to 20.6% in Q2 FY27 from 11.2% in Q2 FY26, an increase of 935 basis points. Compared with Q1 FY27, total income rose 9% from Rs 410 crore and EBITDA increased 31% from Rs 70 crore. The EBITDA margin was 17.0% in Q1 FY27.

Profit before tax before the exceptional loss was Rs 74 crore in Q2 FY27, up 243% from Rs 22 crore in Q2 FY26 and 41% from Rs 53 crore in Q1 FY27. Interest was Rs 2 crore and depreciation was Rs 16 crore, compared with Rs 2 crore and Rs 15 crore, respectively, in Q1 FY27.

How did the godown fire affect GHCL Textiles' results?

GHCL Textiles recorded a Rs 27 crore exceptional loss in Q2 FY27 from a godown fire, which reduced reported profit after tax to Rs 36 crore. The company said the loss was Rs 20 crore net of taxes and reported adjusted profit after tax of Rs 56 crore, with an adjusted margin of 12.5%.

Profit before tax after the exceptional loss was Rs 48 crore, against Rs 74 crore before the loss. Reported profit after tax was still 124% above Rs 16 crore in Q2 FY26, but was 9% below Rs 39 crore in Q1 FY27, which had no exceptional loss. For H1 FY27, reported profit after tax was Rs 75 crore and adjusted profit after tax was Rs 95 crore, versus Rs 30 crore in H1 FY26.

What changed in GHCL Textiles' product and market mix?

GHCL Textiles increased fabric revenue to Rs 73 crore in Q2 FY27 from Rs 38 crore in Q2 FY26, lifting fabric's revenue share to 16.4% from 11.4%. Yarn revenue rose to Rs 373 crore from Rs 301 crore, while fabric's share also exceeded 15.6% in Q1 FY27.

Knitted-fabric sales reached 922 metric tonnes in Q2 FY27, compared with 402 metric tonnes a year earlier, while greige-fabric sales rose to 70 lakh metres from 50 lakh metres. Yarn volume increased to 10.7 thousand metric tonnes from 10.4 thousand metric tonnes, and capacity utilisation reached 99%, compared with 98% in Q2 FY26.

Domestic revenue rose to Rs 412 crore in Q2 FY27 from Rs 309 crore in Q2 FY26, while exports increased to Rs 34 crore from Rs 30 crore but declined from Rs 45 crore in Q1 FY27. Exports therefore accounted for 7.7% of revenue, below 8.8% a year earlier and 11.0% in the preceding quarter. Management cited timely cotton procurement, domestic-market focus and a growing value-added portfolio amid elevated cotton and polyester-chain prices.

How did GHCL Textiles deploy H1 FY27 cash?

GHCL Textiles generated Rs 138 crore of cash inflows net of tax in H1 FY27 and deployed Rs 143 crore, drawing Rs 5 crore from cash and equivalents. The deployment included Rs 74 crore for debt repayment, Rs 52 crore for growth capital expenditure, Rs 12 crore for working capital and other uses, and Rs 6 crore in dividends.

Borrowings declined to Rs 60 crore at September 2026 from Rs 134 crore at March 2026, while cash, bank balances and investments declined to Rs 12 crore from Rs 17 crore. Inventories fell to Rs 340 crore from Rs 421 crore, whereas trade receivables rose to Rs 202 crore from Rs 171 crore. GHCL Textiles reported net debt to equity of 0.03 times at September 30, 2026.

What expansion milestones has GHCL Textiles disclosed?

GHCL Textiles has set a FY30 target of about Rs 2,500 crore in revenue and a 15% to 18% EBITDA margin, compared with Rs 1,335 crore in revenue and a 12% margin in FY26. The company identifies vertical integration, specialised yarn, green energy and operational excellence as the four levers for this target.

The company added 65,000 spindles since 2023 at a Rs 415 crore capital outlay, taking its capacity to 2.25 lakh spindles. It also added 21 knitting machines, including six in Q2 FY27, at a stated Rs 15 crore outlay. Management said the 25,000-spindle unit had reached full capacity and that the board had approved the next spinning-expansion phase and additional rooftop solar capacity.

GHCL Textiles plans 19 knitting machines by Q3 FY27, taking the total to 40 machines, at total capital expenditure of Rs 7 crore. Its 11-megawatt ground-mounted solar project has a Rs 32 crore outlay and is expected to be commissioned by December 2026, with about Rs 6 crore of annual power-cost savings expected. The FY28 plan includes 58,000 additional spindles and 5 megawatts of rooftop solar at a Rs 410 crore project cost.

Conclusion

GHCL Textiles combined 31% Q2 FY27 income growth, a 935-basis-point EBITDA-margin increase and higher fabric sales with a 249% increase in adjusted profit after tax. The Rs 27 crore godown-fire loss changed the reported result, reducing profit after tax to Rs 36 crore, but did not change the company's adjusted presentation of Rs 56 crore.

What to watch next is execution of the 19-machine knitting expansion due by Q3 FY27 and commissioning of the 11-megawatt solar project expected by December 2026. The company has also disclosed FY28 spending of Rs 410 crore for spindles and solar, a FY29 fabric-processing rollout at PM MITRA Park, and a FY30 revenue target of about Rs 2,500 crore.