Seasons Textiles net profit down 24% in Q1FY27 on revenue slide
Seasons Textiles reported a 24% decline in net profit to ₹13.16 lakh for Q1FY27, driven by a 25% revenue contraction and a 55% rise in finance costs. Despite lower material costs, the company's profitability remained thin, with pre-tax margins at just 0.7%. The final net profit figure was significantly boosted by a ₹9.21 lakh deferred tax credit, highlighting a reliance on non-operational adjustments.
*this image is generated using AI for illustrative purposes only.
The Board of Directors of Seasons Textiles approved the unaudited standalone financial results for the first quarter ended June 30, 2026, during a meeting held on August 13, 2026. The home furnishings fabrics manufacturer reported a net profit of ₹13.16 lakh, down from ₹17.40 lakh in the same period of FY25. Revenue from operations contracted by 25% to ₹575.57 lakh, compared to ₹769.72 lakh in Q1FY26.
Financial Performance
The company’s top-line decline was accompanied by a significant rise in finance costs, which jumped 55% year-on-year to ₹82.89 lakh from ₹53.59 lakh. This increase occurred despite a sharp drop in cost of materials consumed, which fell to ₹93.61 lakh from ₹286.27 lakh in the prior year period. Employee benefits expense saw a marginal increase to ₹137.56 lakh.
| Metric | Q1FY27 | Q1FY26 | Change |
|---|---|---|---|
| Revenue from Operations | ₹575.57 lakh | ₹769.72 lakh | -25.2% |
| Total Income | ₹578.70 lakh | ₹770.31 lakh | -24.9% |
| Total Expenses | ₹574.75 lakh | ₹765.83 lakh | -25.0% |
| Profit Before Tax | ₹3.95 lakh | ₹4.48 lakh | -11.8% |
| Net Profit | ₹13.16 lakh | ₹17.40 lakh | -24.4% |
Other income contributed ₹3.13 lakh to the total income, up from ₹0.59 lakh in the previous year. The company recorded no exceptional items or discontinued operations during the quarter.
What the Numbers Show
A notable divergence exists between the company’s pre-tax profit and its net profit for the quarter. While Seasons Textiles reported a modest pre-tax profit of ₹3.95 lakh, the final net profit stood at ₹13.16 lakh. This discrepancy is driven entirely by a deferred tax credit of ₹9.21 lakh, whereas the current tax expense was nil. In the corresponding quarter of FY26, the deferred tax credit was higher at ₹12.92 lakh against a similar pre-tax profit of ₹4.48 lakh. This indicates that the company’s reported profitability remains heavily dependent on deferred tax adjustments rather than operational cash generation, as the pre-tax operating margin was just 0.7% on revenue.
Auditor Review
Bhatia and Bhatia, Chartered Accountants, issued a limited review report on the unaudited standalone financial results. The auditors stated that nothing came to their attention to cause them to believe that the financial statements had not been prepared in accordance with Indian Accounting Standard 34 (Ind AS 34) or contained any material misstatement. The results were reviewed by the Audit Committee and approved by the Board.
Historical Stock Returns for Seasons Textiles
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| 0.0% | +2.26% | +1.88% | +8.39% | -2.36% | 0.0% |
What specific operational strategies is Seasons Textiles implementing to reverse the 25% year-on-year revenue decline in the upcoming quarters?
How does the 55% surge in finance costs correlate with the company's current debt structure, and are there plans for debt restructuring or refinancing?
Given the heavy reliance on deferred tax credits for net profitability, what risks does the company face if future deferred tax benefits diminish or regulatory standards change?
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