Arex Industries Limited reported a significant decline in quarterly profitability for Q3 FY26, with net profit falling 73.4% year-on-year to ₹25.98 lakhs compared to ₹97.73 lakhs in the corresponding quarter of the previous fiscal year. The company's financial results for the quarter ended December 31, 2025, were approved by the Board of Directors on January 27, 2026.

Financial Performance Overview

The company's revenue from operations declined marginally by 1.6% to ₹1,298.65 lakhs in Q3 FY26 from ₹1,320.06 lakhs in Q3 FY25. Total income remained relatively stable at ₹1,298.65 lakhs compared to ₹1,320.12 lakhs in the year-ago period.

Cost Structure Analysis

The primary factor behind the profit decline was a substantial increase in employee benefit expenses, which rose 18.9% to ₹512.05 lakhs from ₹430.63 lakhs in Q3 FY25. This represented the largest expense component, accounting for approximately 39.4% of total revenue.

Nine-Month Performance

For the nine-month period ended December 31, 2025, the company reported net profit of ₹150.71 lakhs, down 36.6% from ₹237.66 lakhs in the corresponding period of FY25. Revenue from operations declined 3.2% to ₹3,726.08 lakhs from ₹3,850.51 lakhs.

Sequential Quarter Comparison

Comparing with the previous quarter (Q2 FY26), net profit declined significantly from ₹100.04 lakhs to ₹25.98 lakhs, while revenue remained relatively stable at ₹1,298.65 lakhs versus ₹1,300.70 lakhs.

Regulatory Compliance

The financial results were prepared in accordance with Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013, and Regulation 33 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. The results underwent limited review by statutory auditors Sweta Patel & Associates, Chartered Accountants, who provided an unqualified review report. The company maintains a single reportable segment, eliminating the need for segmental reporting disclosures.

Arex Industries Limited , a manufacturer of textile labels, has reported a significant turnaround in its financial performance for the second quarter of fiscal year 2026. The company's unaudited financial results, approved by the Board of Directors on November 12, 2025, reveal a remarkable improvement in profitability and operational efficiency.

Financial Highlights

Arex Industries has demonstrated a strong financial performance in Q2 FY26, with revenue from operations increasing to Rs 1,300.70 crore, up 5.45% from Rs 1,233.52 crore in the same quarter last year. The company's net profit saw a substantial jump of 305.36%, reaching Rs 100.04 crore compared to Rs 56.96 crore in Q2 FY25.

Half-Yearly Performance

For the half-year period ended September 30, 2025, Arex Industries posted a profit of Rs 124.73 crore, a significant improvement from the loss of Rs 139.93 crore reported in the corresponding period of the previous year.

Operational Efficiency

The company's operational efficiency has shown marked improvement. The cost of materials consumed decreased to Rs 661.07 crore for the half-year, down from Rs 736.69 crore in the same period last year, indicating better cost management.

Balance Sheet Strength

As of September 30, 2025, Arex Industries' balance sheet reflects a strong financial position:

The company's equity position has strengthened, with total equity increasing to Rs 2,692.08 crore as of September 30, 2025, up from Rs 2,567.34 crore at the end of the previous fiscal year.

Cash Flow Management

Arex Industries has shown improvement in its cash flow management:

• Net cash flow from operating activities for the half-year stood at Rs 397.25 crore.
• The company has reduced its short-term borrowings from Rs 708.80 crore to Rs 542.76 crore, indicating better working capital management.

Outlook

The significant improvement in profitability and operational metrics suggests a positive trajectory for Arex Industries. The management's focus on cost control and operational efficiency appears to be yielding results.

Investors and stakeholders may view these results as indicative of the company's resilience and ability to navigate challenging market conditions. However, it's important to note that future performance may be subject to various internal and external factors affecting the textile industry.

The unaudited financial results have been subject to a limited review by the statutory auditors, as per regulatory requirements. Stakeholders are advised to consider these results in conjunction with more detailed financial reports and industry trends for a comprehensive understanding of the company's position.