Record revenue, but margin recovery delayed by tariff tailwinds & execution risk

₹1,207 Cr delivered; total income ₹1,224 Cr (+27% YoY, but revenue only +25.9%)

Q1 EBITDA margin 13.1%, up 241 bps QoQ, 74 bps YoY from prior-year tariff trough

Q1 new business ₹387 Cr; guidance ₹1,500 Cr FY27 = on track; annualized Q1 ~₹1,548 Cr ≈ 60% of $275M USD target

Q1 achieved 60–65% utilization post-January 2026 NC facility ramp; management guides full-year stable at this level

Admitted product mix impact Q1; price hikes negotiated with customers, impacts expected Q2 onwards

Prior guidance: 15–16% EBITDA + tariff costs 150–200 bps to be eliminated Q1 FY27. Delivered: 13.1% EBITDA margin. Gap remains 190–290 bps; management attributes to gestation (new facility OpEx, ramp costs). No formal cut to target, but timeline clearly extended.

Q1 ₹387 Cr vs ₹1,500 Cr full-year guidance = 26% of target achieved in Q1; annualized run rate ₹1,548 Cr already ~60% of $275M USD ambition (2028). No raise to full-year target but execution pace impressive.

Prior calls implied potential tariff refund upside. Q1 call: 80% of exports on FOB basis (importer bears tariff); no material benefit expected to company. Removes bull case element.

Q1 volume -3% YoY due to West Asia conflict constraints. Management expects momentum to strengthen; issue continues but visibility improving. No guidance change.

Fully insured facility. Confident to serve all customers; will make up lost ground over next couple quarters. Endeavor to offset production loss in other plants.

No tariff refund in Q1 at this point of time.

Do not expect material financial benefit. Nearly 80% exports FOB (importer bears tariff). Process evolving, discussions ongoing; premature to quantify. Clarity expected by end of year.

Product mix impact in Q1. Price conversations concluded with all customers; impacts from Q2 onwards. Realizations will be fine on yearly basis.

UK business 8–10% of total. Active office with increased interactions (4× to 8× annually). FTA impact takes 12–18 months to pan out. Visibility positive going forward.

Cannot guide at precise level. Endeavor is 13% blended margin consolidated basis. Some quarter-to-quarter variation normal; full-year effort is to maintain.

Effort is 60–65% utilization full-year. New facility came mid-Jan; achieved those levels Q1, stable for rest of year. Ups and downs expected; satisfied at current level.

No ceiling in mind. Target to stabilize at 15–16% long-term; will recalibrate as business/market evolves. One step at a time (coming through tariff situation).

Comfortable with 105–110M meters, keeping customer offtake on positive side.

Q1 total income ₹1,224 Cr; guidance reaffirmed 'in line with stated guidance.' Embedded in both core (105–110M meter volume) and new business (₹1,500 Cr target, Q1 on pace)

FTA tailwinds (UK live, EU pending) but 12–18 month ramp expected. Q1 non-US ~30% of core; growth dependent on customer onboarding post-FTA

Long-term structural target; Q1 new business annualized at ~60% of USD 275M run rate. Requires continued margin recovery, tariff stability, and branded business scaling

Q1 achieved 13.1%. Management endeavor is to maintain 13% full-year 'some quarter-to-quarter variation normal.' Below prior 15–16% aspiration but reaffirmed

Prior guidance implied tariff costs 150–200 bps eliminated by Q1 FY27. Delivered margin gap 190–290 bps from target; timeline extended. Mechanism: new facility ramp-up, product mix recovery, operational leverage

Q1 stand-alone slightly >15% (core business); Q1 blended 13.1%. Realization pressure (product mix headwind) offset by Q2+ price hikes

Currently ramping; gestation period ongoing. Brands targeting 17–18% margin at USD 100M scale (still investment phase)

Facility ramping to 60–65% utilization Q1. Management: 'increasing scale of operations every quarter.' Further investment 'balancing' (70–75% in place, evolving business)

Facility down 15–20 days due to heavy rainfall/flooding (July 23–Aug 12). Partially resumed operations Aug 12 with phased normalization. Impact on Q2 volumes TBD; insured for property, inventory, loss of profit.

West Asia conflict disruptions ongoing; Q1 volume -3% YoY due to dispatch delays. Management expects momentum to strengthen but acknowledges issue continues. Q1 volume not to be treated as full-year benchmark (Q1 typically softer).

Bed-linen realization ₹357/meter only +1.5% YoY despite 9–10% rupee depreciation and tariff coming down from 50% to 10%. Product mix shift into lower-realization products; price increase negotiations are ongoing (impacts Q2+). Risk: customer pushback on price hikes or delayed pass-through.

Prior FY26 calls promised 15–16% EBITDA margin + tariff cost elimination by Q1 FY27. Delivered Q1: 13.1% EBITDA margin = 190–290 bps below target. Root cause: new facility gestation period (OpEx, ramp costs) + product mix headwind. Risk: if margin recovery extends beyond FY27, equity upside capped.

Prior bull case expected tariff refund benefit. Q1 clarification: 80% of exports on FOB basis (importer bears tariff), minimal company benefit expected. Additionally, neighboring countries (India 10%, Vietnam/Bangladesh 10–12.5%) enjoy tariff parity; limited pricing power upside from tariff normalization.