VIP Clothing EBITDA Falls 31% as Q2 FY27 Margin Hits 6.74%

VIP Clothing Ltd reported EBITDA of Rs 4.221 crore in Q2 FY27, down 31.33% year on year, as revenue from operations fell 5.27% to Rs 62.587 crore and EBITDA margin contracted to 6.74% from 9.30%. Profit after tax fell to Rs 1.065 crore from Rs 2.238 crore.

Why did VIP Clothing’s Q2 FY27 EBITDA decline?

VIP Clothing said higher sea freight costs and increased yarn costs affected Q2 FY27 profitability, while export shipments were disrupted by unfavourable conditions in the Gulf region. Earnings before interest, tax, depreciation and amortisation, or EBITDA, excluding other income, declined to Rs 4.221 crore from Rs 6.147 crore in Q2 FY26.

The EBITDA decline outpaced the 5.27% fall in revenue from operations, which decreased to Rs 62.587 crore from Rs 66.068 crore. Total expenses declined to Rs 58.366 crore from Rs 59.920 crore, but total revenue, including other income, fell to Rs 63.200 crore from Rs 66.249 crore.

Other income increased to Rs 61.2 lakh in Q2 FY27 from Rs 18.2 lakh a year earlier, although VIP Clothing defines EBITDA excluding other income. Management said it intends to implement appropriate price revisions in coming periods to pass on higher input costs and support margin recovery, without disclosing the timing or size of those revisions.

Q2 also weakened from Q1 FY27, when revenue from operations was Rs 64.693 crore and EBITDA was Rs 5.069 crore. Revenue declined 3.25% sequentially and EBITDA declined 16.73%, while the EBITDA margin fell from 7.84% to 6.74%.

How did VIP Clothing’s quarterly profitability compare?

VIP Clothing’s Q2 FY27 EBITDA margin was 6.74%, down 256 basis points from 9.30% in Q2 FY26 and 110 basis points from 7.84% in Q1 FY27. Profit after tax, or PAT, margin similarly declined to 1.68% from 3.38% a year earlier and 2.95% in the preceding quarter.

PAT fell by Rs 1.173 crore year on year and by Rs 84.7 lakh sequentially. The drop in PAT was steeper than the reduction in revenue, with Q2 FY27 PAT of Rs 1.065 crore less than half the Rs 2.238 crore reported in Q2 FY26.

Below EBITDA, depreciation and amortisation declined to Rs 58.6 lakh from Rs 67.7 lakh, while finance cost declined to Rs 1.936 crore from Rs 2.234 crore. These reductions did not offset the operating decline: profit before tax decreased to Rs 2.312 crore from Rs 3.417 crore, while tax expense rose to Rs 1.247 crore from Rs 1.179 crore.

Diluted earnings per share were Rs 0.12 in Q2 FY27, compared with Rs 0.25 in Q2 FY26 and Rs 0.21 in Q1 FY27. VIP Clothing did not provide a segment-level revenue or profit split across its innerwear, leisurewear, outerwear or other apparel categories.

What changed in VIP Clothing’s H1 FY27 results?

VIP Clothing reported H1 FY27 revenue from operations of Rs 127.280 crore, down 3.22% from Rs 131.516 crore in H1 FY26, while EBITDA declined 25.03% to Rs 9.290 crore. The first-half figures show profit falling faster than revenue, as in the second quarter.

H1 FY27 EBITDA margin fell 212 basis points to 7.30% from 9.42%, and PAT margin fell to 2.32% from 3.38%. PAT declined by Rs 1.483 crore to Rs 2.977 crore, while profit before tax decreased to Rs 4.946 crore from Rs 6.683 crore.

Finance cost provided a partial offset, declining 18.81% to Rs 3.802 crore from Rs 4.683 crore, according to management. Depreciation and amortisation also declined to Rs 1.314 crore from Rs 1.354 crore, but these reductions did not prevent the first-half decline in EBITDA and PAT.

How did VIP Clothing’s working capital and balance sheet change?

VIP Clothing’s inventories increased to Rs 108.434 crore as at 30 September 2026 from Rs 95.490 crore as at 31 March 2026. Management said it had built inventory to support upcoming-quarter requirements, timely stock availability and uninterrupted order fulfilment.

Trade receivables rose to Rs 106.420 crore from Rs 95.754 crore over the same period. Total current assets increased to Rs 241.688 crore from Rs 217.041 crore, while total assets rose to Rs 348.619 crore from Rs 328.253 crore.

Cash and cash equivalents increased to Rs 7.033 crore at 30 September 2026 from Rs 75.1 lakh at 31 March 2026. Management said VIP Clothing allotted 84,75,000 convertible warrants in September 2026 at Rs 22.50 each to promoter and non-promoter investors as part of efforts to strengthen its capital base.

Total shareholders’ funds increased to Rs 206.727 crore from Rs 194.370 crore. Current borrowings rose to Rs 67.643 crore from Rs 65.556 crore, while non-current borrowings increased to Rs 8.199 crore from Rs 24.7 lakh.

What is VIP Clothing planning after Q2 FY27?

VIP Clothing is pursuing premiumisation, portfolio diversification and wider distribution while managing the cost pressures that affected its Q2 FY27 EBITDA margin of 6.74%. Its disclosed network includes more than 110,000 retailers, more than 550 distributors, more than 10 e-commerce platforms, two exclusive brand outlets and three warehouses.

Management said it is expanding presence across general trade, modern trade, e-commerce and quick-commerce channels, including Blinkit, Swiggy Instamart and Zepto. The presentation does not quantify revenue from these channels or disclose their contribution to the Rs 62.587 crore of Q2 FY27 revenue from operations.

The product strategy includes Frenchie X in men’s innerwear, BRAT and the Yuva Series in children’s wear, and expansion through the Feelings women’s brand. Management also identified women’s innerwear as a planned development opportunity, but did not disclose a launch date, investment amount or expected revenue contribution.

Conclusion

VIP Clothing’s Q2 FY27 results show that profitability deteriorated faster than sales, with revenue from operations down 5.27%, EBITDA down 31.33% and PAT down from Rs 2.238 crore to Rs 1.065 crore. The H1 FY27 comparison followed the same direction, with EBITDA margin falling to 7.30% from 9.42%.

The next disclosures to watch are management’s intended price revisions for yarn and freight costs, and whether the inventory build of Rs 108.434 crore supports order fulfilment in the upcoming quarter. VIP Clothing’s planned expansion in quick-commerce, premium products and women’s innerwear remains subject to execution details not provided in the presentation.