Credo Brands Marketing Limited FY26 PAT fell 31% as revenue fell

Credo Brands Marketing Limited reported FY26 revenue from operations of Rs 592.1 crore, down 4% from Rs 618.2 crore in FY25, while profit after tax fell 31% to Rs 47.4 crore. Mufti lifted gross profit margin by 1.2 percentage points to 58.4%, but lower revenue and higher operating costs reduced earnings.

Why did Mufti’s FY26 profit fall despite a higher gross margin?

Mufti’s profit after tax (PAT) fell to Rs 47.4 crore in FY26 from Rs 68.4 crore in FY25, and PAT margin declined to 8.0% from 11.1%. Revenue from operations decreased by Rs 26.1 crore to Rs 592.1 crore, while earnings before interest, tax, depreciation and amortisation (EBITDA) declined by Rs 25.5 crore to Rs 154.2 crore. EBITDA margin consequently reduced to 26.0% from 29.1%.

The gross margin improvement did not offset changes below gross profit. Gross profit declined by Rs 8.4 crore to Rs 345.5 crore as sales fell, while employee cost increased by Rs 3.3 crore to Rs 35.4 crore and other expenses rose by Rs 13.8 crore to Rs 155.9 crore. Depreciation increased to Rs 74.4 crore from Rs 68.6 crore, taking earnings before interest and tax (EBIT) down to Rs 90.7 crore from Rs 117.2 crore.

How did Mufti’s revenue and margins move over five years?

Mufti’s FY26 revenue was above Rs 341.2 crore in FY22 but below the Rs 618.2 crore reported in FY25. Revenue rose from Rs 498.2 crore in FY23 to Rs 567.3 crore in FY24 and Rs 618.2 crore in FY25, before declining to Rs 592.1 crore in FY26. The FY26 decline was therefore the first revenue contraction in the five financial years shown.

Gross profit margin reached 58.4% in FY26, the highest figure in the FY22-to-FY26 series, compared with 57.2% in FY25 and 56.9% in FY22. Raw-material cost declined to Rs 246.6 crore from Rs 264.3 crore, while gross profit fell to Rs 345.5 crore from Rs 353.9 crore because the revenue reduction was larger in rupee terms.

Profitability below gross profit moved in the opposite direction from the gross margin. EBITDA margin of 26.0% was below 29.1% in FY25, 28.3% in FY24, 32.9% in FY23 and 27.9% in FY22. PAT margin of 8.0% was also the lowest in the presented five-year series, while earnings per share declined to Rs 7.3 from Rs 10.5 in FY25 and Rs 12.1 in FY23.

What operating-cost changes reduced Mufti’s FY26 earnings?

Mufti’s employee cost and other expenses together increased by Rs 17.1 crore in FY26, while gross profit fell by Rs 8.4 crore. Employee cost was Rs 35.4 crore against Rs 32.1 crore in FY25, and other expenses were Rs 155.9 crore against Rs 142.1 crore. These movements accompanied EBITDA of Rs 154.2 crore, compared with Rs 179.7 crore a year earlier.

Below EBITDA, depreciation rose by Rs 5.8 crore to Rs 74.4 crore, whereas finance cost was unchanged at Rs 25.5 crore. Other income increased to Rs 10.9 crore from Rs 6.1 crore, but profit before tax still decreased to Rs 63.8 crore from Rs 91.7 crore. FY26 also included exceptional items of Rs 1.4 crore and a tax charge of Rs 16.4 crore, compared with tax of Rs 23.4 crore in FY25.

FY26 EBITDA was below Rs 160.5 crore in FY24 and Rs 163.9 crore in FY23, although it remained above Rs 95.1 crore in FY22. PAT of Rs 47.4 crore was below Rs 59.2 crore in FY24 and Rs 77.5 crore in FY23, but above Rs 35.7 crore in FY22. The figures show that the FY26 earnings decline followed revenue growth from FY22 through FY25 rather than a return to FY22 profit levels.

What do Mufti’s March 2026 balance sheet and cash flow show?

Mufti reported total assets of Rs 801.9 crore at March 2026, compared with Rs 769.2 crore at March 2025. Current assets increased to Rs 446.0 crore from Rs 415.0 crore, including cash and cash equivalents of Rs 52.4 crore versus Rs 45.2 crore. Inventories increased to Rs 110.4 crore, while trade receivables declined to Rs 236.3 crore from Rs 239.1 crore.

Inventory days reduced to 65 at March 2026 from 67 at March 2025, but debtor days increased to 147 from 133. Creditor days remained 16 in both periods. Borrowings were nil in both current and non-current categories at March 2026, compared with Rs 1.4 crore combined at March 2025; lease liabilities totalled Rs 228.2 crore at March 2026.

Net cash from operating activities declined to Rs 132.4 crore in FY26 from Rs 159.0 crore in FY25. Cash generated from operations fell to Rs 150.4 crore from Rs 184.4 crore, while working-capital changes were an outflow of Rs 5.4 crore after an inflow of Rs 3.4 crore in FY25. Net cash used in investing activities was Rs 35.5 crore and financing activities used Rs 89.7 crore, leaving a Rs 7.2 crore increase in cash and cash equivalents.

Conclusion

Mufti’s FY26 record combines a five-year-high gross profit margin of 58.4% with lower sales and reduced operating and net profitability. Revenue fell 4% to Rs 592.1 crore, EBITDA decreased 14% to Rs 154.2 crore and PAT declined 31% to Rs 47.4 crore, as employee cost, other expenses and depreciation rose despite lower raw-material cost.

Next, management’s disclosed plans centre on expanding the domestic exclusive brand outlet network, growing sales through its website and e-commerce partners, and investing further in information-technology infrastructure. Mufti had 419 exclusive brand outlets across 227 cities as of September 30, 2026, and said it was evaluating artificial intelligence and machine-learning software for its stores.