VIP Clothing Limited profit falls 52% as September revenue declines

VIP Clothing reported profit after tax of Rs 1.0646 crore for the quarter ended September 30, 2026, about 52% below the prior-year quarter, as revenue from operations fell 5% to Rs 62.5872 crore and cost of materials consumed rose 62% to Rs 19.7644 crore.

Why did VIP Clothing’s September-quarter profit fall?

VIP Clothing’s September-quarter profit fell as a Rs 3.4817 crore decline in revenue from operations coincided with a Rs 7.5705 crore increase in material consumption and a higher deferred-tax charge. Profit after tax was Rs 1.0646 crore in the quarter ended September 30, 2026, compared with Rs 2.2383 crore in the quarter ended September 30, 2025, a reduction of Rs 1.1737 crore.

Profit before tax declined 32% to Rs 2.3115 crore from Rs 3.4173 crore a year earlier. The deferred-tax charge increased to Rs 1.2469 crore from Rs 1.1790 crore, while the filing showed no current-tax expense in either September quarter. Earnings per share were Rs 0.12, compared with Rs 0.25 in the prior-year quarter.

How did VIP Clothing’s revenue and costs change in the quarter?

VIP Clothing’s revenue from operations declined 5% year on year to Rs 62.5872 crore in the September 2026 quarter, while total income fell 5% to Rs 63.1996 crore. Other income increased to 61.24 lakh from 18.15 lakh, partly offsetting the reduction in operating revenue. Revenue was also below Rs 64.6928 crore in the June 2026 quarter.

Cost of materials consumed rose to Rs 19.7644 crore from Rs 12.1939 crore a year earlier. Purchases of stock-in-trade declined to Rs 34.1966 crore from Rs 36.9859 crore, while employee-benefit expense decreased to Rs 4.6023 crore from Rs 5.1299 crore. Changes in inventories represented a Rs 8.6243 crore reduction in expense, compared with a Rs 4.0757 crore reduction in the September 2025 quarter.

Finance costs declined to Rs 1.9357 crore from Rs 2.2341 crore and other expenses fell to Rs 4.4489 crore from Rs 5.4111 crore. Knitting and processing charges were Rs 3.9782 crore, below Rs 4.2752 crore a year earlier. Total expenses consequently declined 3% to Rs 60.8881 crore, a smaller reduction than the fall in profit before tax.

What do VIP Clothing’s six-month results show?

VIP Clothing’s profit after tax for the six months ended September 30, 2026 was Rs 2.9771 crore, down 33% from Rs 4.4599 crore in the six months ended September 30, 2025. Revenue from operations declined 3% to Rs 127.2800 crore from Rs 131.5163 crore, while profit before tax fell 26% to Rs 4.9456 crore from Rs 6.6834 crore.

Material consumption over the six-month period increased 62% to Rs 34.4742 crore from Rs 21.3170 crore. Purchases of stock-in-trade rose 4% to Rs 65.9175 crore, while employee-benefit expense declined to Rs 9.0204 crore from Rs 10.3456 crore. The inventory-change line switched to a Rs 7.3318 crore reduction in expense from a Rs 4.7921 crore expense in the prior-year half.

The half-year deferred-tax charge was Rs 1.9685 crore, compared with Rs 2.2235 crore a year earlier. Basic earnings per share for the six-month period were Rs 0.33, against Rs 0.50 in the prior-year period. VIP Clothing reported one segment, “Hosiery and others”, under Indian Accounting Standard 108, so the filing provides no product-line or geographical revenue split.

How did VIP Clothing’s working capital and funding change?

VIP Clothing used Rs 13.8225 crore in operating activities in the six months to September 30, 2026, compared with generating Rs 17.6949 crore in the corresponding 2025 period. The reversal followed a Rs 12.9436 crore increase in inventories and a Rs 11.0112 crore increase in trade receivables, which produced a total Rs 23.2643 crore working-capital outflow.

At September 30, 2026, inventories stood at Rs 108.4336 crore, up from Rs 95.4901 crore at March 31, 2026, and trade receivables increased to Rs 106.4197 crore from Rs 95.7543 crore. Current borrowings rose to Rs 67.6429 crore from Rs 65.5558 crore, while non-current borrowings increased to Rs 8.1985 crore from 24.65 lakh over the same balance-sheet dates.

Financing activities generated Rs 15.0331 crore during the six months, versus a Rs 11.5434 crore outflow a year earlier. This included Rs 9.3796 crore of net proceeds from warrants convertible into equity shares and Rs 9.9697 crore of net borrowing proceeds. Cash and cash equivalents rose to Rs 7.0330 crore at September 30, 2026, from 75.13 lakh at March 31, 2026.

What is VIP Clothing’s warrant issue and what remains payable?

VIP Clothing allotted 84.75 lakh convertible warrants on September 12, 2026, after shareholders approved a preferential issue of up to 2.12 crore warrants at an extraordinary general meeting on June 11, 2026. Each warrant is convertible into one equity share with a face value of Rs 2 at an issue price of Rs 22.50, including a premium of Rs 20.50.

The allotment followed receipt of 25% of the issue price, and the remaining 75% is payable when the warrants are exercised. The National Stock Exchange of India and BSE granted in-principle approval on August 28, 2026. Warrants not exercised within 18 months from the allotment date will lapse, and amounts paid on those warrants will be forfeited, according to the filing.

Conclusion

VIP Clothing’s September-quarter result combined a 5% decline in operating revenue with a 62% increase in material consumption, reducing profit after tax to Rs 1.0646 crore from Rs 2.2383 crore. For the first half, revenue was Rs 127.2800 crore and profit after tax was Rs 2.9771 crore, while higher inventories and receivables contributed to a Rs 13.8225 crore operating cash outflow.

The next disclosed matter is the exercise of the 84.75 lakh warrants allotted on September 12, 2026, for which 75% of the Rs 22.50 issue price remains payable on exercise. VIP Clothing stated that unexercised warrants will lapse 18 months from allotment and the amounts paid will be forfeited, making the pace of conversion a defined future funding consideration.