Sreeleathers Limited reported a significant improvement in profitability for the first quarter of FY26, with net profit surging nearly 140% year-on-year. The Kolkata-based leather manufacturer posted a net profit of ₹698.7 lakh for the quarter ended June 30, 2026, compared to ₹293.3 lakh in the same period last year.

Revenue from operations grew 19.9% to ₹5,962.5 lakh, up from ₹4,980.2 lakh in Q1FY25. This top-line expansion was accompanied by a rise in total income to ₹6,042.9 lakh, reflecting robust core business performance alongside stable other income contributions.

Financial Performance

The company’s ability to manage expenses relative to revenue growth contributed to the margin expansion. While total expenses increased to ₹5,114.8 lakh from ₹4,624.1 lakh in the prior year quarter, the profit before tax more than doubled to ₹928.2 lakh from ₹400.5 lakh.

Earnings per share (basic) stood at ₹3.02, compared to ₹1.27 in the corresponding quarter of FY25. On a sequential basis, net profit declined from ₹967.1 lakh in Q4FY26, consistent with typical seasonal patterns in the leather sector.

What the Numbers Show

A key observation from the filing is the divergence between revenue growth and expense growth. While revenue rose nearly 20%, total expenses grew by only 10.6%. This operating leverage suggests improved cost efficiency or favorable input cost dynamics during the quarter. Specifically, purchase of stock in trade increased to ₹4,731.9 lakh from ₹4,010.4 lakh, but this was partially offset by a positive change in inventories of ₹290.9 lakh, compared to an inventory drawdown of ₹83.6 lakh in the previous year. This indicates the company may have built up inventory in anticipation of future demand, impacting short-term cost of goods sold but potentially supporting future revenue streams.

Sreeleathers reported a sharp acceleration in profitability for the first quarter, with net profit rising 141% year-on-year to ₹70 million. The leather manufacturer’s top-line revenue also expanded, growing 19.7% to ₹596 million from ₹498 million in the corresponding period last year.

The company’s operating performance improved significantly, with EBITDA more than doubling to ₹89 million from ₹40 million. This operational leverage was reflected in the EBITDA margin, which expanded to 14.93% from 7.97% in the prior year quarter.

Financial Highlights

What the Numbers Show

The divergence between revenue growth and profit expansion indicates strong operating leverage. While revenue grew by nearly 20%, net profit surged by over 140%. This suggests that the additional revenue generated contributed disproportionately to the bottom line, likely due to fixed cost absorption or improved input cost dynamics, resulting in a near-doubling of the EBITDA margin.

The company’s ability to convert nearly 20% of its revenue into net profit (₹70 million on ₹596 million) highlights an efficient cost structure during the period, compared to the prior year’s lower conversion rate.