Pearl Global in FY26: Record revenue crosses INR 5,000 crore as capacity scales past 100 million pieces

Pearl Global Industries Limited closed FY26 with two milestones that management repeatedly highlighted across the investor presentation and earnings call: consolidated revenue crossed INR 5,000 crore and installed capacity surpassed 100 million pieces per annum. The year was not free of shocks. Management described FY26 as a period marked by US tariff disruptions, geopolitical uncertainty, and rising energy-linked pressures on raw materials and logistics.

Despite this backdrop, the group reported consolidated revenue of INR 5,025 crore, up 11.5% year on year. Adjusted EBITDA (excluding ESOP expenses) rose to INR 468 crore, up about 14%, with an adjusted EBITDA margin of 9.3%. Profit after tax stood at INR 270 crore, a 17% year-on-year increase. Management also provided a bridge to an underlying margin picture: excluding the reciprocal tariff impact of about INR 36 crore and incremental losses in Bihar and Guatemala of about INR 13 crore, adjusted EBITDA margin would have been about 10.3%.

The contrast between consolidated strength and standalone softness remained visible. Standalone revenue fell 9.6% to INR 1,081 crore, which management attributed to the adverse impact of reciprocal and penal tariffs on India exports to the US. Still, standalone profitability improved through cost restructuring, with adjusted EBITDA margin rising to 6.2% from 5.6% in FY25. Excluding the tariff impact of about INR 19 crore, management indicated standalone adjusted EBITDA margin would have been about 8%.

FY26 performance: growth held up as margins edged higher

A key feature of the FY26 narrative was the role of Pearl Global’s multi-country operating model. Management stated that tariffs affected India operations more sharply, but diversified manufacturing across Bangladesh, Vietnam, Indonesia, and Guatemala helped protect volumes and maintain customer relationships.

Operationally, the company shipped 78.1 million pieces in FY26 versus 74.3 million pieces in FY25. Installed capacity reached about 101 million pieces, and management stated this was achieved significantly ahead of an earlier internal target of H1 FY27.

Consolidated Q4FY26 also stood out as a record quarter on revenue. Q4 revenue was INR 1,314 crore, up 6.9% year on year. Adjusted EBITDA was INR 135 crore, up 13.7%, with a margin of 10.3%. PAT in Q4 was INR 81 crore.

Financial summary (consolidated)

Management also highlighted that in Q4, excluding reciprocal tariff impact of about INR 5 crore and incremental Bihar and Guatemala losses of about INR 3 crore, group adjusted EBITDA margin would have been about 10.9%.

Tariffs, country mix, and why India declined on standalone revenue

Management described FY26 as a year of shifting tariff regimes in the US, including a period where India-origin garments faced substantially higher charges. In the earnings call, management explained that US customers pushed production away from India towards other origins during the high-tariff period. This shift affected India’s standalone revenue trajectory, especially after existing orders booked earlier had shipped out.

The company framed this as a relationship-led decision. It chose to share part of the tariff burden via discounts to maintain long-standing customer ties. In their view, the diversified footprint allowed the group to retain wallet share even when the India leg was stressed.

Management also linked a potential recovery in India to easing tariff conditions and the prospect of India’s free trade agreements with the UK and EU. While implementation timelines were not provided, management said customers had already started visiting and were showing interest in diversifying sourcing into India.

Capex and capacity: FY26 execution and FY27 intent

Pearl Global reported total capex of about INR 250 crore for FY26. The presentation broke it into Bangladesh capacity expansion (about INR 110 crore), India capacity expansion (about INR 20 crore), sustainable laundry expansion (about INR 90 crore), solar power installation (about INR 5 crore), and other capex for replacement and efficiency (about INR 25 crore).

The FY26 capex update focused on the Bangladesh expansion progress, with management stating construction milestones were largely on track and completion expected by H1 FY27. They guided that this capex would add about 6 million pieces per annum of capacity in Bangladesh during FY27.

A second capex lever was the in-house laundry expansion. The company stated this is intended to reduce washing costs and water usage, with a targeted ROCE of 18% to 20%. Management reiterated on the call that laundry capex is a margin lever that can help the company move from a 10% EBITDA milestone toward a 10% to 12% trajectory over time.

For FY27, management said it is in the process of outlining capex commitments of INR 200 to 250 crore across geographies. Two early board-approved items were highlighted on the call and in corporate disclosures: increasing stake in the Indonesia business and planning for Vietnam expansion.

In Indonesia, the company disclosed that it will acquire an additional 9.99% stake in PT Pinnacle Apparels for USD 1.406 million through its step-down subsidiary, taking ownership to 99.92%. This was positioned as strategic given ramp-up progress in Indonesia.

In Vietnam, management stated it had identified a land parcel and was at an advanced stage of concluding the purchase, with consideration expected in the range of USD 2.5 million to USD 3 million. The company linked this to strong utilization and customer traction, noting Vietnam utilization improved to over 80% in FY26.

Balance sheet, dividends, and what investors should track

Pearl Global’s balance sheet metrics in the presentation signalled strong liquidity. As of March 2026, cash and bank balance was INR 634 crore (excluding cash earmarked for LC payments). Net debt to EBITDA remained low at 0.11x. Net worth increased to INR 1,438 crore.

The company also highlighted shareholder returns. It declared a second interim dividend of INR 8.5 per share, taking total FY26 dividend to INR 14.5 per share. Dividend payout ratio for FY26 was shown at about 24.7% versus 22.9% in FY25, with management stating it follows a dividend policy of at least 20% of consolidated PAT.

On the operating side, working capital metrics moved in the wrong direction in FY26. Working capital days increased to 43 days from 38 days in FY25, with inventory days rising to 64 from 57. Management suggested in the call that part of the inventory build could be interpreted in the context of higher expected shipments.

For investors, the next year’s execution checkpoints are clear from management commentary. First is whether the group can sustain a 10% EBITDA margin on a full-year basis in FY27, which management expressed confidence about. Second is operational improvement in Guatemala, where management said it is targeting breakeven in FY27. Third is India recovery as tariff pressures ease and as potential FTAs begin to influence sourcing decisions.

Pearl Global enters FY27 with scale, an expanding multi-country footprint, and a stated focus on capacity and capability building. The documents also show a management team that quantified tariff impacts and linked capex to operational outcomes. The durability of margins, the pace of new capacity commercialization, and the discipline of working capital will define how the FY26 momentum translates into the next phase.