Margin expands 3.59 points, but negative other income cuts profit
Revenue growth outpaced costs, but other income swung to a Rs 26.35 cr loss and pulled pre-tax profit down 9.64% QoQ.
Filed 05 Nov 2026, 13:42 IST · GHCL Textiles Ltd (GHCLTEXTIL)
Key takeaways
- Standalone operating margin expanded 3.59 percentage points QoQ to 20.49% as revenue grew 8.95% and expenses grew 4.24%.
- Standalone net profit fell 8.92% QoQ despite a 32.07% rise in operating profit because other income swung to negative Rs 26.35 cr, equal to -55.24% of pre-tax profit.
- At 20.49%, the company’s operating margin was 8.93 percentage points above the 11.56% median for 262 reported Consumer Discretionary peers.
Price around the results
Operating profit rose while other income reversed
This was a standalone quarter in which operating profit rose 32.07% QoQ, but pre-tax profit fell 9.64% and net profit fell 8.92%. The main drag was other income, which moved from Rs 0.66 cr in Q1FY27 to negative Rs 26.35 cr in Q2FY27 and represented -55.24% of pre-tax profit. The 0.60 percentage-point decline in the tax rate and 10.06% fall in interest expense were not enough to offset that swing.
Costs stayed below revenue growth and lifted margin
Revenue increased 8.95% QoQ while expenses increased 4.24%, so operating margin widened by 3.59 percentage points to 20.49%. Depreciation rose 2.75% and therefore did not explain the operating improvement. Across the reported sequence, operating margin moved from 11.2% in Q1FY26 to 16.9% in Q1FY27 and 20.49% in Q2FY27.
Margin remains above the reported peer median
GHCL Textiles’ 20.49% operating margin was 8.93 percentage points above the 11.56% median among 262 Consumer Discretionary peers that had reported. Management said Q2FY27 yarn sales volume was 10.7 thousand MT, while knitted fabric sales volume was 922 MT. The company said it plans to extend from yarn into knitted, woven and dyed fabrics to seek higher margins and synergies with its existing business.
Management sets expansion targets amid cotton risks
Management said it targets Rs 2,500 cr of revenue and a 15-18% EBITDA margin by FY30. The company’s presentation said cotton yields in non-irrigated areas are expected to decline because of the El Niño effect, while global cotton production is estimated to fall 3.3% to 118 Mn bales. It also said the FY27 RoDTEP allocation was cut to Rs 100Bn from Rs 182Bn, limiting its impact on domestic-focused players.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹446 cr | ₹409 cr | +8.95% |
| Other income | ₹-26 cr | ₹1 cr | — |
| Expenses | ₹354 cr | ₹340 cr | +4.24% |
| Operating profit | ₹91 cr | ₹69 cr | +32.07% |
| Operating margin (%) | 20.49% | 16.90% | — |
| Interest | ₹2 cr | ₹2 cr | -10.06% |
| Depreciation | ₹16 cr | ₹15 cr | +2.75% |
| Profit before tax | ₹48 cr | ₹53 cr | -9.64% |
| Tax | ₹12 cr | ₹13 cr | -11.76% |
| Net profit | ₹36 cr | ₹39 cr | -8.92% |
| EPS (₹) | ₹3.75 | ₹4.12 | -8.98% |
Operating margin of 20.49% compares with a Consumer Discretionary sector median of 11.56% across 262 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q2FY27 yarn sales volume was 10.7 thousand MT.
- Q2FY27 knitted fabric sales volume was 922 MT.
Guidance & outlook
- The company targets Rs 2,500 Cr revenue and a 15-18% EBITDA margin by FY30.
New initiatives
- The company plans to extend from yarn into knitted, woven and dyed fabrics to achieve superior margins and synergies.
Competition
- India's apparel share of the EU market is only about 3-4%.
Problems & risks
- Cotton crop yields in non-irrigated areas are expected to decline due to the El Niño effect.
- Global cotton production is estimated to fall by 3.3% to 118 Mn bales.
- The FY27 RoDTEP allocation was cut to Rs 100Bn from Rs 182Bn, limiting its impact on domestic-focused players.
What to watch
- Whether standalone operating margin holds above 20.49% after its 3.59 percentage-point QoQ expansion.
- Whether other income recovers from negative Rs 26.35 cr or remains a drag on pre-tax profit.
- Whether yarn volume moves from 10.7 thousand MT and knitted fabric volume from 922 MT.