Indian Terrain Q4 FY26: EBITDA Surges 160%, Net Loss Narrows to ₹4.91 Cr
Indian Terrain Fashions Limited reported audited standalone results for Q4 and FY26, with net loss narrowing to ₹4.91 crore from ₹42.66 crore. Q4 EBITDA surged 160.35% to ₹12.02 crore on revenue of ₹106.53 crore (+19% YoY). Full-year revenue grew to ₹377.67 crore, with operating cash inflows of ₹19.43 crore and store count rationalised to 181.
*this image is generated using AI for illustrative purposes only.
Indian Terrain Fashions Limited announced its audited standalone financial results for the quarter and financial year ended March 31, 2026, marking a significant improvement in operating performance and a strong recovery in profitability. The company reported a net loss of ₹0.90 crore for the quarter ended March 31, 2026, compared to a net loss of ₹2.17 crore in the same period last year. For the full financial year, the net loss narrowed significantly to ₹4.91 crore from ₹42.66 crore in the previous year. The Board of Directors approved the results during a meeting held on May 16, 2026, with the statutory auditors issuing an unmodified opinion on the audited financial results.
Financial Performance
Revenue from operations for the quarter stood at ₹106.53 crore, a rise from ₹89.53 crore in the corresponding quarter of the previous year, reflecting a year-on-year growth of 19.00%. Total income for the quarter was ₹107.75 crore. For the full financial year, revenue from operations increased to ₹377.67 crore, up from ₹340.60 crore in the previous year. Total income for the year was recorded at ₹381.81 crore.
The company's total expenses for the year amounted to ₹378.52 crore, slightly lower than the ₹386.37 crore reported in the previous year. Profit before tax for the year was ₹2.71 crore, a turnaround from the loss before tax of ₹41.01 crore in the previous year. The table below summarises the key financial metrics for the full year:
| Metric: | FY26 (₹ Cr) | FY25 (₹ Cr) |
|---|---|---|
| Revenue from Operations: | 377.67 | 340.60 |
| Total Income: | 381.81 | 345.36 |
| Total Expenses: | 378.52 | 386.37 |
| Net Profit/(Loss): | (4.91) | (42.66) |
The quarterly performance is detailed below:
| Particulars (₹ Cr): | Q4 FY26 | Q4 FY25 | YoY Growth |
|---|---|---|---|
| Revenue from Operations: | 106.53 | 89.53 | 19.00% |
| Total Income: | 107.75 | 90.76 | — |
| EBITDA*: | 12.02 | 4.62 | 160.35% |
| EBITDA Margin (%): | 11.28% | 5.16% | — |
| PBT: | 3.54 | (3.84) | 192.16% |
| PBT Margin (%): | 3.32% | (4.29%) | — |
| PAT**: | (0.90) | (2.17) | 58.59% |
| PAT Margin (%): | (0.84%) | (2.43%) | — |
*EBITDA calculated before depreciation, finance cost, tax, and exceptional items.
**PAT calculated before considering OCI
The detailed income statement for Q4 FY26, including sequential comparison, is presented below:
| Particulars (₹ Cr): | Q4 FY26 | Q3 FY26 | Q4 FY25 | FY26 | FY25 |
|---|---|---|---|---|---|
| Net Revenues: | 106.53 | 101.40 | 89.53 | 377.67 | 340.60 |
| Product Cost: | 59.19 | 56.96 | 50.77 | 218.38 | 211.98 |
| Gross Margin: | 47.34 | 44.44 | 38.76 | 159.29 | 128.62 |
| GM (%): | 44.44% | 43.83% | 43.29% | 42.18% | 37.76% |
| Employee Cost: | 5.91 | 6.11 | 5.42 | 23.52 | 22.30 |
| Selling Expenses: | 16.32 | 13.15 | 14.80 | 56.65 | 60.98 |
| Other Expenses: | 14.31 | 13.21 | 15.15 | 46.83 | 52.21 |
| Operating EBITDA: | 10.80 | 11.97 | 3.38 | 32.29 | (6.87) |
| EBITDA (%): | 10.14% | 11.80% | 3.78% | 8.55% | (2.02%) |
| Depreciation: | 3.24 | 3.42 | 4.04 | 14.08 | 17.94 |
| Finance Cost: | 5.24 | 4.69 | 4.41 | 19.06 | 20.95 |
| Other Income: | 1.22 | 0.78 | 1.23 | 4.14 | 4.76 |
| Exceptional Items: | — | (0.58) | — | (0.58) | — |
| Profit Before Tax: | 3.54 | 4.06 | (3.84) | 2.71 | (41.01) |
| PBT (%): | 3.32% | 4.00% | (4.29%) | 0.72% | (12.04%) |
| Taxes: | 4.44 | 1.50 | (1.67) | 7.62 | 1.65 |
| OCI: | (0.19) | (0.05) | 0.01 | (0.29) | (0.10) |
| PAT (with OCI): | (1.09) | 2.51 | (2.16) | (5.20) | (42.76) |
| PAT (%): | (1.02%) | 2.48% | (2.41%) | (1.38%) | (12.56%) |
Earnings per equity share (face value of ₹2 each, not annualised) for the full year stood at basic and diluted EPS of ₹(0.98), compared to ₹(9.48) in the previous year. For Q4 FY26, basic and diluted EPS was ₹(0.18), compared to ₹(0.48) in Q4 FY25.
Operational Highlights
EBITDA for Q4 FY26 improved significantly by 160.35% to ₹12.02 crore, supported by stronger gross margins and cost rationalisation. For the full year, EBITDA stood at ₹36.43 crore compared to a negative ₹2.12 crore in the previous year. Gross margins improved during the quarter by 115 bps, supported by disciplined discounting, improved product mix, and better sourcing efficiencies. The company also maintained continued focus on channel optimisation, inventory productivity, and working capital discipline, contributing to stronger earnings quality and operational stability.
FY26 marked an important year of stabilisation, recovery, and operational strengthening, with the company successfully transitioning from losses toward sustainable profitability. Key strategic developments during the year included a gradual reduction in dependence on EBO-led growth, supported by healthy expansion in MBO and franchise-led channels. Structural improvements in gross margins, calibrated discounting strategies, and tighter cost controls significantly strengthened operating profitability. The online channel was strategically managed with controlled discounting, resulting in healthier margins and stronger brand positioning, while the retail network was optimised through selective expansion in high-potential markets.
Noteworthy regulatory developments during the year include a provision of ₹3.95 crore recognised for interest on delayed payments to MSME vendors under the MSMED Act, disclosed under Other Expenses. Additionally, the company recognised a one-time incremental provision of ₹0.58 crore towards gratuity and compensated absences following the notification of the New Labour Codes by the Government of India, presented as an Exceptional Item. The increase in deferred tax expense during the quarter is primarily attributable to disallowances under Section 43B(h) of the Income-tax Act, 1961 relating to delayed payments to MSME vendors, which are temporary in nature and expected to reverse upon settlement of outstanding dues.
Channel and Category Performance
Q4 net sales grew by ₹17 crore (+19% YoY), driven primarily by strong growth in online and franchise-led channels. Online sales surged by ₹4.26 crore, driven by improved digital traction, festive campaigns, expanded fulfilment reach, and the expansion of the outright model business with Flipkart from the conventional SOR model. MBO net sales grew by ₹17.62 crore (+61% YoY), supported by deeper distributor penetration and improved retail partner productivity. For the full year, net sales grew by ₹37.07 crore (+11% YoY), driven primarily by strong expansion in MBO (+₹52.04 crore) and EFO (+₹6.05 crore), while EBO and LFO recorded a slight decline impacted by store optimisation initiatives and moderated retail footfalls.
From a category perspective, shirts remained the dominant revenue category, contributing 48% in Q4 and 47% for FY26, reinforcing the brand's core positioning in smart-casual wear. Trousers and T-Shirts together accounted for approximately 45% of revenue, reflecting successful category diversification and growing traction of the Terrain Jeans and Terrathlete sub-labels. Denim showed improved full-year traction at 6% in FY26 versus 4% in Q4, signalling early momentum from the Terrain Jeans refresh and targeted assortment planning across channels.
Balance Sheet and Working Capital
The standalone balance sheet as of March 31, 2026 reflected a stable financial position. The company's working capital discipline continued to improve, with a steady reduction in gross working capital days and net working capital days.
| Standalone Balance Sheet (₹ Cr): | Mar'26 | Sep'25 | Mar'25 |
|---|---|---|---|
| Share Capital: | 10.13 | 10.13 | 9.14 |
| Reserves and Surplus: | 173.79 | 172.41 | 173.68 |
| Non-Current Liabilities: | 36.99 | 40.17 | 46.66 |
| Current Liabilities: | 218.07 | 216.48 | 212.86 |
| Total Equity & Liabilities: | 438.98 | 439.19 | 442.34 |
| Non-Current Assets: | 52.80 | 67.51 | 75.26 |
| Current Assets: | 386.18 | 371.68 | 367.08 |
| Total Assets: | 438.98 | 439.19 | 442.34 |
Working capital trends across key periods are summarised below:
| No. of Days: | Mar'26 | Dec'25 | Sep'25 | Jun'25 | Mar'25 |
|---|---|---|---|---|---|
| Receivables: | 239 | 235 | 247 | 246 | 254 |
| Inventory: | 72 | 72 | 79 | 81 | 76 |
| Gross Working Capital: | 311 | 308 | 326 | 327 | 329 |
| Trade Payables: | 74 | 66 | 68 | 68 | 64 |
| Net Working Capital: | 237 | 241 | 258 | 259 | 266 |
Improved receivables (254 to 239 days) and inventory efficiency (76 to 72 days) highlight proactive efforts in collections, stock rationalisation, and supply chain planning. Net cash inflow from operating activities for the year stood at ₹19.43 crore, compared to ₹19.24 crore in the previous year, reflecting sustained operational cash generation.
Store Network
The company's exclusive store network stood at 181 stores as of March 31, 2026, compared to 208 stores as of March 31, 2025, reflecting deliberate store rationalisation as part of the company's channel optimisation strategy.
| Store Format: | Stores (Mar'26) | Stores (Mar'25) |
|---|---|---|
| COCO (Company Owned Company Operated): | 14 | 13 |
| COFO (Company Owned Franchisee Operated): | 46 | 58 |
| FOFO (Franchisee Owned Franchisee Operated): | 96 | 115 |
| EFO (Exclusive Factory Outlet): | 24 | 21 |
| Out of India: | 1 | 1 |
| Total Stores: | 181 | 208 |
Management Commentary
Commenting on the results, Mr. Charath Narsimhan, Managing Director & Chief Executive Officer, said: "FY'26 has been an important year of execution, stabilisation, and recovery for Indian Terrain. Over the last two years, we have consciously shifted our focus from chasing scale to building a healthier, more sustainable business with stronger margins, disciplined capital allocation, and better-quality growth. The results of those efforts are now becoming visible across our financial and operating performance."
He further added: "During the year, we strengthened our profitability meaningfully, improved cash flow discipline, and continued to enhance the overall quality of our channel mix. Our MBO network continued to expand steadily, helping us deepen market penetration across key regions while improving scalability through a more asset-light approach. At the same time, our online business delivered better profitability through calibrated discounting and improved product positioning. We have also made significant progress in improving inventory productivity, reducing operational inefficiencies, and building a more agile merchandising and planning framework, enabling us to respond better to evolving consumer preferences and market dynamics. With a stronger operating foundation, improving profitability, and a sharper strategic focus, we believe Indian Terrain is entering the next phase of growth with greater confidence, resilience, and long-term value creation potential."
Board Decisions
In addition to the financial results, the Board approved the re-appointment of M/s. RVKS & Associates as Internal Auditors of the company for the financial year 2026-27. The meeting commenced at 11:50 AM IST and concluded at 02:15 PM IST. The trading window for dealing in the securities of the company will remain closed for Designated Persons and their immediate relatives until May 18, 2026. The results were prepared in accordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013, and the company operates exclusively in the apparel and accessories segment with no separate reportable segments under Ind AS 108.
Source: None/Company/INE611L01021/8d43139d8ac847ab.pdf
Historical Stock Returns for Indian Terrain
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -2.47% | -1.42% | +4.44% | -10.30% | -26.91% | -5.13% |
With MBO and franchise-led channels driving growth, how quickly can Indian Terrain scale these asset-light distribution channels to offset the revenue decline from the 27 EBO store closures in FY26?
Given that receivables remain elevated at 239 days despite improvement, what structural changes in credit policy or channel mix could bring working capital days to industry-standard levels in the near term?
As the Terrain Jeans and Terrathlete sub-labels gain early traction, could category diversification beyond shirts realistically shift Indian Terrain's revenue mix enough to reduce concentration risk within the next two fiscal years?
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