Kitex Garments returns to Q2 profit, half-year loss remains

Kitex Garments Limited reported a consolidated net profit of Rs 13.7060 crore for the quarter ended September 30, 2026, reversing a Rs 17.1205 crore loss in the June 2026 quarter, but the group recorded a Rs 3.4146 crore net loss for the half year ended September 30, 2026. Quarterly revenue from operations rose to Rs 203.0358 crore.

Why did Kitex Garments return to profit in Q2?

Kitex Garments returned to consolidated profit in the September 2026 quarter as revenue from operations reached Rs 203.0358 crore, compared with Rs 158.4255 crore in the June 2026 quarter, while profit before tax changed to Rs 22.1512 crore from a loss before tax of Rs 13.3523 crore. Total tax expense was Rs 8.4452 crore, producing net profit of Rs 13.7060 crore.

The September-quarter result also improved from a Rs 6.2185 crore consolidated net loss in the quarter ended September 30, 2025. Revenue from operations was Rs 122.1017 crore in that earlier quarter, while total income increased to Rs 212.8204 crore in September 2026 from Rs 166.0698 crore in June 2026 and Rs 134.4932 crore a year earlier. Total expenses were Rs 190.6692 crore in the latest quarter.

What changed in Kitex Garments' quarterly expenses?

Kitex Garments reported a negative Rs 47.4488 crore amount under changes in inventories of finished goods and work-in-progress for the September 2026 quarter, compared with negative Rs 26.0737 crore in the June 2026 quarter. The Rs 21.3751 crore change in this expense line occurred alongside a Rs 5.8147 crore sequential increase in material consumption to Rs 110.5334 crore.

Employee-benefit expense rose to Rs 45.0425 crore from Rs 33.4726 crore in June 2026, and other expenses increased to Rs 49.9230 crore from Rs 36.1192 crore. Depreciation and amortisation increased to Rs 18.5212 crore from Rs 17.5793 crore, while finance costs were Rs 14.0979 crore against Rs 13.6060 crore. Total expenses rose by Rs 11.2471 crore sequentially, less than the Rs 46.7510 crore increase in total income.

Compared with September 2025, material consumption rose from Rs 67.7678 crore to Rs 110.5334 crore and depreciation and amortisation increased from Rs 7.9817 crore to Rs 18.5212 crore. Total expenses increased by Rs 36.3793 crore from Rs 154.2899 crore, while total income increased by Rs 78.3272 crore from Rs 134.4932 crore.

Why did Kitex Garments report a first-half loss?

Kitex Garments reported a first-half consolidated loss because its Rs 13.7060 crore September-quarter profit did not offset the Rs 17.1205 crore net loss in the June 2026 quarter. Revenue from operations for the half year ended September 30, 2026 increased to Rs 361.4613 crore from Rs 318.7936 crore a year earlier, but net profit changed to a loss of Rs 3.4146 crore from a profit of Rs 13.0849 crore.

Profit before tax for the latest half year was Rs 8.7988 crore, down from Rs 25.9000 crore in the corresponding 2025 period. Tax expense was Rs 12.2134 crore, exceeding the half-year profit before tax. The corresponding prior-year period included exceptional items of Rs 17.5000 crore, while the September 2026 half-year column reported no exceptional item.

The holding-company and consolidated outcomes differed. Kitex Garments recorded standalone net profit of Rs 25.0284 crore for the September 2026 quarter and Rs 56.1874 crore for the half year, versus consolidated net profit of Rs 13.7060 crore and a consolidated loss of Rs 3.4146 crore, respectively. The consolidated accounts include subsidiaries and an associate.

What do the subsidiaries and review report show?

Kitex Garments' statutory auditor said six subsidiaries had combined assets of Rs 96.6025 crore at September 30, 2026, no revenue for either the September quarter or first half, and net losses of Rs 2.3106 crore for the quarter and Rs 4.5790 crore for the half year. These interim subsidiary results were furnished by management and were not reviewed by the auditor.

The review report identifies Kitex Littlewear Limited, Kitex Babywear Limited, Kitex Kidswear Limited, Kitex Knits Limited, Kitex Packs Limited and Kitex Socks Limited as wholly owned subsidiaries. It identifies Kitex Apparel Parks Limited as a subsidiary and Kitex USA LLC as an associate. No current-period share of the associate's loss was recognised because the holding company's share of losses had exceeded the investment cost in earlier years.

Consolidated property, plant and equipment was Rs 1,241.7189 crore at September 30, 2026, up from Rs 1,141.6766 crore at March 31, 2026. Capital work-in-progress fell to Rs 877.9563 crore from Rs 946.4237 crore, while consolidated non-current borrowings rose to Rs 992.1941 crore from Rs 980.5782 crore and current borrowings rose to Rs 310.8071 crore from Rs 218.7989 crore.

What happened to Kitex Garments' cash flow?

Kitex Garments used Rs 28.7583 crore in consolidated operating activities during the half year ended September 30, 2026, compared with cash generated from operating activities of Rs 215.3340 crore in the corresponding prior-year period. The latest period included increases of Rs 84.8947 crore in inventories and Rs 48.3943 crore in trade and other receivables, partly offset by a Rs 46.4900 crore increase in trade and other payables and provisions.

Consolidated investing activities used Rs 71.7100 crore, including Rs 59.9002 crore for property, plant and equipment, intangible assets, capital work-in-progress and capital advances. Financing activities generated Rs 56.5295 crore, including a Rs 133.7134 crore net movement in working-capital loans, while interest paid was Rs 47.6727 crore. Cash and cash equivalents were Rs 71.2238 crore at September 30, 2026, down from Rs 114.3893 crore at March 31, 2026.

Conclusion

Kitex Garments' September-quarter consolidated result reversed the June-quarter loss as revenue rose to Rs 203.0358 crore and net profit reached Rs 13.7060 crore. The first-half result remained loss-making at Rs 3.4146 crore, reflecting the scale of the June loss, tax expense of Rs 12.2134 crore and the gap between standalone and group-level results.

Next, investors can watch whether quarterly revenue, inventory movements and operating cash flow change in subsequent results. The board-approved February 2025 scheme to demerge the textile business of Kitex Childrenswear Limited into Kitex Garments remains subject to necessary regulatory approvals, while the group said it will monitor final state rules and government clarifications on the New Labour Codes.