Globe borrowings rise as H1 working capital requirements expand

Globe Enterprises (India) Ltd, referred to as Globe, reported Rs 207.80 crore of consolidated borrowings in H1 FY27, up from Rs 166.75 crore at FY26, as trade receivables and inventories increased by a combined Rs 45.53 crore. The balance-sheet increase followed a decline in disclosed annual interest coverage to 1.59 times in FY26 from 2.25 times in FY24.

Why did Globe’s borrowings increase in H1 FY27?

Globe’s consolidated borrowings increased by Rs 41.05 crore from FY26 to H1 FY27, with both current and non-current balances rising. Current borrowings rose to Rs 181.70 crore from Rs 162.34 crore, while non-current borrowings increased to Rs 26.10 crore from Rs 4.41 crore. The presentation does not specify the facilities, maturity dates, interest rates or purposes behind the additional borrowings.

Current borrowings remained the larger component, representing Rs 181.70 crore of the Rs 207.80 crore total at H1 FY27. Total current liabilities increased by Rs 19.33 crore to Rs 276.94 crore, while total non-current liabilities rose by Rs 21.96 crore to Rs 29.97 crore. Over the same period, total equity increased by Rs 6.84 crore to Rs 152.90 crore.

How much did Globe’s working capital increase?

Globe’s inventories rose by Rs 22.76 crore to Rs 165.94 crore at H1 FY27, while trade receivables increased by Rs 22.77 crore to Rs 215.80 crore. The two balances totalled Rs 381.74 crore, compared with Rs 336.21 crore at FY26. Their Rs 45.53 crore combined increase exceeded the Rs 41.05 crore increase in total borrowings over the same balance-sheet comparison.

Total current assets increased by Rs 49.77 crore to Rs 397.41 crore, against a Rs 19.33 crore rise in current liabilities to Rs 276.94 crore. Cash and cash equivalents declined to Rs 10.91 lakh at H1 FY27 from Rs 29.84 lakh at FY26, while other bank balances were broadly unchanged at Rs 57.64 lakh from Rs 56.68 lakh. Other current assets increased to Rs 14.63 crore from Rs 10.16 crore.

The rise in inventories and receivables came alongside higher sales. Consolidated revenue from operations increased 29.26% year on year to Rs 394.05 crore in H1 FY27 from Rs 304.84 crore in H1 FY26. Globe does not disclose receivable days, inventory days, customer concentration, receivable ageing, or whether inventory growth reflected volumes, input costs or product mix.

What does Globe’s interest coverage history show?

Globe reported interest coverage of 1.59 times in FY26, down from 1.87 times in FY25 and 2.25 times in FY24. The disclosed annual measure therefore declined in each of the three financial years shown. Over the same period, the debt-equity ratio increased from 1.03 times in FY24 to 1.08 times in FY25 and 1.14 times in FY26.

Finance costs increased to Rs 17.55 crore in FY26 from Rs 15.79 crore in FY25 and Rs 14.77 crore in FY24. Earnings before interest and tax, or EBIT, rose to Rs 32.93 crore in FY26 from Rs 27.81 crore in FY25, but finance costs also increased. Globe has not provided an H1 FY27 interest-coverage ratio, making FY26 the latest disclosed annual ratio.

In H1 FY27, finance cost rose to Rs 9.95 crore from Rs 8.37 crore in H1 FY26, while EBIT increased to Rs 18.85 crore from Rs 14.99 crore. Profit before tax increased 34.27% year on year to Rs 8.90 crore. These half-year figures show higher operating profit and financing costs, but do not establish the pricing or duration of the larger H1 FY27 borrowing balance.

How did H1 FY27 operating performance compare with the balance-sheet movement?

Globe’s consolidated total income increased 28.70% year on year to Rs 395.11 crore in H1 FY27, while earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 22.12% to Rs 21.35 crore. Revenue growth was faster than EBITDA growth during the half year. Cost of materials consumed increased to Rs 275.67 crore from Rs 175.98 crore, while purchases of stock-in-trade declined to Rs 83.73 crore from Rs 95.30 crore.

Globe’s H1 FY27 profit before tax was Rs 8.90 crore, compared with Rs 6.63 crore in H1 FY26, despite the Rs 1.59 crore increase in finance cost. Total expenses rose to Rs 373.76 crore from Rs 289.53 crore, while EBITDA increased by Rs 3.87 crore. The presentation does not connect the increase in receivables, inventories or borrowings to individual customer orders, business divisions or product categories.

What plans could affect Globe’s funding and working-capital needs?

Globe states that it completed 100% ownership of Globe Denwash in FY 2025-26 after acquiring the remaining 30% stake. Management says the integration is intended to reduce dependence on external garment processing, improve control over quality and finishing, and enable faster sampling and product development. The presentation does not quantify capital expenditure, savings, borrowing needs or a financial return timetable for Globe Denwash.

Globe also says its Fashion Attire Division is expanding into jeans, knits, woven products, dresses, women’s apparel, printed tops, shirts and jackets. Its stated plans include exploring technical textiles and chemicals, increasing production capability, serving higher order volumes, and entering new domestic and export geographies. These are management plans, and the presentation gives no targets for inventory, receivables, borrowings or finance costs associated with them.

Conclusion

Globe entered H1 FY27 with Rs 207.80 crore of borrowings, Rs 381.74 crore in combined inventories and trade receivables, and Rs 10.91 lakh of cash and cash equivalents. Revenue and profit before tax both increased year on year, but the expansion in current operating assets coincided with higher debt after annual interest coverage declined from 2.25 times in FY24 to 1.59 times in FY26.

The next reported results may show whether inventories and receivables convert into cash as revenue develops beyond the H1 FY27 level of Rs 394.05 crore. Globe’s disclosed plans for Globe Denwash integration and the Fashion Attire Division leave unresolved the related funding requirement, working-capital effect, finance-cost outcome and timetable for returns.