Mafatlal core units grow 24.6% as Q2 revenue falls 22.9%

Mafatlal Industries Limited (Mafatlal) reported 24.6% year-on-year growth in combined Textile and Related Products and Digital Infrastructure revenue to Rs 540.0 crore in Q2FY27, while total revenue from operations fell 22.9% to Rs 794.1 crore after Consumer Durables and Others revenue declined 57.4%.

Why did Mafatlal’s Q2FY27 revenue fall?

Mafatlal’s Q2FY27 revenue fell because the Rs 342.0 crore decline in Consumer Durables and Others exceeded the Rs 106.4 crore combined increase in Textile and Related Products and Digital Infrastructure. Consumer Durables and Others revenue decreased to Rs 254.1 crore from Rs 596.1 crore in Q2FY26, while total revenue from operations decreased from Rs 1,029.6 crore to Rs 794.1 crore. Management said it was taking a selective approach in consumer durables, prioritising strategically aligned opportunities over revenue-led expansion.

Mafatlal’s revenue mix moved towards its two growing segments during the first half of FY27, or H1FY27. Textile and Related Products represented 50% of H1FY27 revenue, compared with 35% in H1FY26, while Consumer Durables and Others fell to 43% from 64% and Digital Infrastructure increased to 7% from 1%. The two core segments supplied 68.0% of Q2FY27 revenue and 82.6% of segment earnings before interest and tax, or EBIT.

What drove Mafatlal’s core-segment growth in Q2FY27?

Mafatlal’s Textile and Related Products revenue increased 12.4% to Rs 469.6 crore in Q2FY27, supported by its shift towards Uniforms Solution business. Management cited execution of a large Uniforms Solution order across about 28,000 schools in 33 Telangana districts. The order involved last-mile distribution of school uniforms, school bags and shoes.

Mafatlal’s Digital Infrastructure revenue rose 344.1% to Rs 70.3 crore in Q2FY27 from Rs 15.8 crore a year earlier. The segment executed a project for 128 computer labs in Odisha’s Adarsha Vidyalaya schools, including desktops, interactive panels and artificial-intelligence-enabled teaching software. Management said institutional and turnkey projects can include operations and maintenance services of up to five years.

The H1FY27 segment results show the change was not limited to the quarter. Textile and Related Products revenue grew 9.2% to Rs 875.6 crore from Rs 801.9 crore, and the Integrated Uniforms Solution share of that segment rose to 96% from 92%. Digital Infrastructure revenue increased 402.3% to Rs 112.3 crore from Rs 22.4 crore, whereas Consumer Durables and Others revenue declined 48.2% to Rs 748.7 crore.

How did Mafatlal’s Q2FY27 profitability change?

Mafatlal’s operating earnings reduced by about half in Q2FY27, with operating earnings before interest, tax, depreciation and amortisation, or operating EBITDA, declining 50.3% to Rs 14.6 crore. Its operating EBITDA margin narrowed to 1.8% from 2.9% in Q2FY26. Operating EBITDA excludes dividend income, gains on sales of investments and fixed assets, and rent income from investment property.

Mafatlal’s reported EBITDA declined 40.5% to Rs 21.3 crore and its EBITDA margin fell to 2.7% from 3.4%, despite gross profit rising 30.2% to Rs 148.1 crore. Gross margin increased to 18.4% from 10.9%, but other expenses rose to Rs 109.5 crore from Rs 54.0 crore and employee expenses increased to Rs 17.1 crore from Rs 14.9 crore. Management attributed the quarterly margin impact to power and fuel, subcontracting and logistics costs associated with the orders executed.

Mafatlal’s segment EBIT trends differed across businesses in Q2FY27. Textile and Related Products EBIT declined 66.9% to Rs 5.9 crore, with the margin decreasing to 1.3% from 4.3%; Digital Infrastructure EBIT rose 201.7% to Rs 9.7 crore, although its margin declined to 13.8% from 20.3%. Consumer Durables and Others EBIT fell 61.0% to Rs 3.3 crore, leaving total segment EBIT down 36.0% at Rs 18.9 crore.

What did Mafatlal report for profit, debt and orders?

Mafatlal reported profit after tax of Rs 11.0 crore in Q2FY27, down 50.3% from Rs 22.2 crore in Q2FY26, while profit before tax declined 48.9% to Rs 14.8 crore. The profit-after-tax margin was 1.4%, compared with 2.1% a year earlier. The quarter included a net deferred-tax-assets charge of Rs 3.8 crore under Indian Accounting Standard 12.

Mafatlal’s H1FY27 profit after tax declined 62.4% to Rs 25.6 crore from Rs 68.1 crore, on revenue from operations of Rs 1,736.5 crore, down 23.5%. H1FY27 operating EBITDA was Rs 38.2 crore, down 50.1%, and its margin was 2.2% versus 3.4%. Gross debt stood at Rs 83.2 crore on September 30, 2026, compared with Rs 60.8 crore on March 31, 2026; management linked working-capital movements to ongoing order fulfilment.

Mafatlal reported a running order book of about Rs 575 crore as of September 30, 2026, for execution in the near future. This comprised about Rs 462 crore in Textile and Related Products and Rs 87 crore in Digital Infrastructure. The presentation did not provide the segment allocation for the remaining approximately Rs 26 crore of the order book.

What is Mafatlal planning after Q2FY27?

Mafatlal plans to increase its holding in PiefloWtech Solutions to 80% through the acquisition of an additional 20% stake, with completion expected by December 31, 2026. The board approved the transaction to strengthen Digital Infrastructure capabilities. The plan follows Digital Infrastructure revenue growth of 402.3% to Rs 112.3 crore and segment EBIT of Rs 14.3 crore in H1FY27.

Mafatlal’s board also approved an interim dividend of Rs 1 per equity share for FY27. Management said its focus remains on opportunities aligned with its capabilities, customer relationships and expansion of its client base across the three segments. The presentation does not quantify prospective revenue, profit or margin effects from the PiefloWtech Solutions stake increase.

Conclusion

Mafatlal’s Q2FY27 results show a material change in revenue mix: Textile and Related Products and Digital Infrastructure added Rs 106.4 crore of revenue, but this did not offset the Rs 342.0 crore reduction in Consumer Durables and Others. The shift coincided with operating EBITDA falling to Rs 14.6 crore and the Textile and Related Products EBIT margin declining to 1.3%.

The next disclosed markers are execution of the approximately Rs 575 crore order book and the expected completion of the additional PiefloWtech Solutions stake acquisition by December 31, 2026. Management’s selective Consumer Durables and Others approach, costs attached to institutional-order execution and the contribution of up-to-five-year operations and maintenance services in Digital Infrastructure remain matters to watch.