Record growth masking margin compression; 3% PAT target unconvincing

Delivered ₹4432.5 Cr, 29-30% YoY growth confirmed

Q2 EBITDA 3.5%, H1 avg 3.2%; no sequential improvement vs Q1

Order book growth cited; translates to ~₹470 Cr/month run-rate

Current NPM 1.6%; would require >80% margin expansion with current cost structure

Prior Q1 call: mid-single-digit FY27 guidance. Q2 call: pursuing mid-teens growth; order book 13% up validates acceleration.

EBITDA margin 3.5% in Q2, still below 5% historical; management claims 50-70 bps annual improvement but delivery not visible QoQ.

₹154 Cr net cash as of Sept 30, vs -₹105 Cr net debt at March '26. Working capital discipline improved.

French retailer 5-year sourcing contract expected to contribute ~$50M/year revenue; partially visible in H1 GMV ₹11,366 Cr vs ₹10,100 Cr prior.

H1 up 23%, order book 13% up at $5,670 Cr. Pursuing mid-teens growth; cautious on macro but focusing on execution.

Targeting 50-70 bps margin improvement per year; PAT margin target 3% in 2-3 years. Q3-Q4 will show more positive momentum.

New verticals (Michael Yee, SaaS, Knit Gallery) are investment phase; will turn profitable in 2-3 quarters. Existing top 20 verticals growing 5-7%, new ones faster.

Q2 was quarterly bonus payout (Oct), not structural. Expect normalization in Q3. Annual employee cost growth target 5-7%, not 17%.

5% was aspirational; 3% more realistic interim target. Conservative approach ensures we hit it while scaling. Balance sheet and cash will support it.

Management transition 2-3 quarters back; Knit Gallery ramp expected to drive recovery. Bangladesh order allocation cautious due to geopolitical risk but compliant.

H1 losses ~₹11 Cr; exploring options with ABG (owner). May relocate operations, reduce headcount, or restructure. Priority action for FY27.

U.S. fastest-growing market. Top 10 retailers 7 opened accounts. Target 40-50% of revenue in next 4-5 years once accounts mature.

Targeting ₹70-80 Cr annually for new verticals. Breakeven expected 2-3 quarters out; ₹40 Cr spent in H1 on acquisition. Headroom to bring capex down further.

PDS agility is the hedge. Multi-country sourcing model allows supply chain pivot. When disruption occurs, it's an opportunity for us.

Order book 13% up, H1 growth 23% YoY, sourcing contracts ramping. But macro cautious, capex cut signals balance preservation.

Q2 EBITDA 3.5% vs H1 avg 3.2%; NPM compressed to 1.6% vs 2-2.5% prior. Employee costs up 17% YoY, not declining.

Capex cut is deliberate balance-sheet discipline. New verticals in investment phase; expect profitability in 2-3 quarters.

Employee costs +17% YoY, other expenses +33% QoQ. NPM 1.6%, EBITDA 3.5%. 3% PAT target in 2-3 years requires >80% margin expansion; current trajectory unproven.

Michael Yee vertical, SaaS, Knit Gallery are all in investment/loss phase. Management claims 2-3 quarters to breakeven but capex has been cut 53% YoY; funding constraints may delay profitability.

Manufacturing revenue flat YoY, margin fell from ~8% to 2.8% (Q2 EBIT ₹26 Cr on ₹452 Cr revenue). Bangladesh order allocation cautious due to geopolitical risk. Management transition impact still settling.

H1 losses ~₹11 Cr; CEO said revenue growth 30% but cost structure needs much more. No retail partner now (lost ABG). Exploring relocation, cost restructuring, or exit in FY27.

Management positioned this as strength (agility in disruption = opportunity), but Bangladesh order allocation is being cautious. Turkey operations have shifted from trading to sourcing model due to inflation. Vietnam/Turkey cost inflation could squeeze margins.