Ambika Cotton Mills Reports 13.3% Growth in Q2 Net Profit Amid Stable Revenue

Ambika Cotton Mills , a prominent player in the Indian textile industry, has released its financial results for the second quarter, showcasing resilience in a challenging market environment.

Financial Performance Highlights

The company reported a notable increase in its quarterly net profit, demonstrating its ability to enhance profitability despite flat revenue growth. Here's a breakdown of the key financial metrics:

Metric	Q2 FY2025-26	Q2 FY2024-25	YoY Change
Net Profit	₹159.40 crore	₹140.70 crore	+13.3%
Revenue	₹2,000.00 crore	₹2,000.00 crore	0%
EBITDA	₹266.90 crore	₹234.00 crore	+14.1%
EBITDA Margin	13.37%	11.68%	+169 bps

Profit Growth Despite Revenue Stagnation

Ambika Cotton Mills managed to increase its net profit by 13.3% year-over-year, reaching ₹159.40 crore in Q2 FY2025-26, up from ₹140.70 crore in the same quarter of the previous fiscal year. This growth in profitability is particularly noteworthy given that the company's revenue remained flat at ₹2,000.00 crore.

Improved Operational Efficiency

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a significant improvement, rising to ₹266.90 crore from ₹234.00 crore in the corresponding quarter last year. This 14.1% increase in EBITDA indicates enhanced operational efficiency and cost management.

Margin Expansion

Ambika Cotton Mills demonstrated its ability to extract more value from its operations, as evidenced by the expansion in its EBITDA margin. The EBITDA margin improved to 13.37% in Q2 FY2025-26, up from 11.68% in the same period last year, representing an increase of 169 basis points.

Outlook

While the company has not provided specific forward-looking statements, the improvement in profitability and operational metrics suggests that Ambika Cotton Mills is navigating the current market conditions effectively. The ability to enhance margins in a flat revenue environment indicates strong cost control measures and possibly a favorable product mix.

Investors and market observers will likely keep a close watch on how the company maintains this momentum in the coming quarters, especially in light of ongoing challenges in the textile sector and broader economic conditions.

Note: All figures are in Indian Rupees (₹) and 1 crore = 10 million.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-1.63%	-0.37%	-6.22%	-8.59%	-10.74%	+85.14%

Ambika Cotton Mills Limited , a textile manufacturer based in Coimbatore, has been slapped with a hefty fine by the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for non-compliance with Securities and Exchange Board of India (SEBI) regulations. The company now faces a total penalty of Rs 27.10 lakh and plans to challenge the decision.

Regulatory Non-Compliance

The fine was imposed due to violations of SEBI regulations 17(1)(b) and 17(1A), which pertain to the composition of the board of directors and the age limit for non-executive directors, respectively. Each exchange levied penalties totaling Rs 13.56 lakh, including GST, bringing the combined fine to Rs 27.10 lakh.

Breakdown of Penalties

According to the LODR (Listing Obligations and Disclosure Requirements) data filed by the company, the penalties were broken down as follows:

Regulation	NSE Fine (Rs)	BSE Fine (Rs)
17(1)(b)	8,95,000	8,95,000
17(1A)	2,54,000	2,54,000
Subtotal	11,49,000	11,49,000
GST @18%	2,06,820	2,06,820
Total Fine	13,55,820	13,55,820

Company's Response

Ambika Cotton Mills initially filed a waiver application, seeking relief from the penalties. However, the NSE rejected this application, as confirmed in their order (Ref. No.NSE/LIST/SOP/0993).

In response to the rejection, the company has taken the following steps:

Paid the full fine amount to both NSE and BSE.
Announced plans to file an appeal before the Securities Appellate Tribunal (SAT) against NSE's order.

Implications and Next Steps

The imposition of these fines highlights the importance of strict adherence to SEBI regulations for listed companies. Ambika Cotton Mills' decision to appeal to the SAT indicates their disagreement with the interpretation of the regulations in question.

As the company proceeds with its appeal, stakeholders will be watching closely to see how the SAT views the case and whether it will provide any clarity on the interpretation of regulations 17(1)(b) and 17(1A) of the SEBI (LODR) Regulations, 2015.

Ambika Cotton Mills has assured its investors that it will keep them informed of any developments regarding the appeal process. The outcome of this case could have implications not only for Ambika Cotton Mills but also for other listed companies in terms of regulatory compliance and interpretation.