Dollar Industries Limited , a leading player in the Indian hosiery space, has announced robust financial results for the second quarter of fiscal year 2026, demonstrating significant growth in profitability and operational efficiency.

Financial Highlights

The company reported a 5.6% year-on-year increase in revenue from operations, reaching ₹47,029.00 lakhs for Q2 FY26. More impressively, Dollar Industries saw a substantial 23.3% year-on-year growth in operating EBITDA, which stood at ₹6,031.00 lakhs for the quarter. The operating EBITDA margin expanded by 183 basis points to 12.8%, reflecting the company's focus on operational leverage and cost optimization.

Profit After Tax (PAT) for Q2 FY26 grew by an impressive 32.7% year-on-year to ₹3,517.00 lakhs, with the PAT margin improving by 151 basis points to 7.4%. This strong bottom-line performance underscores the company's ability to translate top-line growth into enhanced profitability.

Key Performance Drivers

Dollar Industries' robust quarterly performance was driven by several factors:

1. Consistent demand across key product categories
2. Significant benefits from operational leverage
3. Successful cost optimization initiatives
4. Reduction in advertisement expenses as a percentage of operating income

The company has managed to curtail its advertisement expenses to 6.2% of operating income in H1 FY26, compared to 7.2% in H1 FY25, and plans to further reduce this percentage in the coming quarters.

Product Segment Performance

The thermals segment emerged as a standout performer, registering a robust growth of 23.5% year-on-year in value terms. Volumes in this segment increased by 28.1% year-on-year in Q2 FY26, supported by expectations of a prolonged winter season and improved product availability across key geographies.

Distribution Channel Expansion

Dollar Industries continued to strengthen its presence across modern trade, e-commerce, and Quick Commerce channels. These channels collectively contributed 10.2% of total sales during the quarter. Notably, revenue from quick commerce, although on a relatively small base, scaled sharply to contribute 4.0% to overall sales, underscoring its increasing significance in the company's retail mix.

Strategic Merger Announcement

In a significant development, Dollar Industries has announced a proposed merger of nine promoter group companies into the listed entity. This strategic move aims to consolidate brand ownership, manufacturing units, and enhance operational efficiency. Key highlights of the merger include:

1. Consolidation of the 'Dollar' brand ownership directly under Dollar Industries Limited
2. Streamlining of operations and alignment of long-term goals
3. Strengthening of in-house production capacity
4. Reduction in intercompany transactions
5. Avoidance of potential conflicts of interest

The company has applied to BSE and NSE for their prior approval to the scheme before submission to NCLT for its approval.

Management Commentary

Vinod Kumar Gupta, Managing Director of Dollar Industries Limited, commented on the results: "We are pleased to report another quarter of steady performance and strategic progress. The proposed merger marks a key milestone for our company, consolidating our brand ownership and enhancing our operational control and efficiency. Our focus on operational leverage and cost optimization has yielded significant benefits, as reflected in our expanding margins. We remain committed to driving growth through stronger brand ownership, operational excellence, and deeper channel integration, positioning Dollar Industries for sustained value creation and long-term success."

Dollar Industries continues to demonstrate its resilience and adaptability in the dynamic Indian hosiery market. With its strategic initiatives and robust financial performance, the company appears well-positioned for future growth and market leadership.

Dollar Industries Ltd's stock price experienced a significant uptick following the announcement of a proposed merger with nine promoter group companies. The share price initially surged by 8%, reaching Rs 396.00, before settling at Rs 383.10, marking a 4.72% gain for the day.

Merger Details and Implications

The proposed merger aims to consolidate various entities within the promoter group into the listed company. These entities include:

1. Companies owning the Dollar brand
2. Real estate used for operations
3. Manufacturing units

This strategic move is expected to increase the promoter group's shareholding from 72.21% to 73.60% post-merger.

Anticipated Benefits

Dollar Industries anticipates several advantages from this consolidation:

• Brand Ownership: Direct control over the Dollar brand
• Enhanced Production Control: Improved oversight of manufacturing processes
• Streamlined Operations: Simplified organizational structure
• Reduced Related Party Transactions: Minimizing inter-company dealings
• Improved Governance: Enhanced transparency and corporate governance practices

Vertical Integration

The merger is designed to achieve vertical integration by incorporating manufacturing units into the listed entity. This integration is expected to:

• Reduce reliance on external vendors
• Lower administrative costs
• Improve overall operational efficiency

Market Performance

While the stock reacted positively to the merger announcement, it's worth noting that Dollar Industries has faced challenges in the broader market context. Over the past 12 months, the stock has experienced a decline of 24.73%.

The market's initial reaction suggests that investors view the proposed merger as a positive step towards streamlining operations and potentially improving the company's financial performance. However, as with any corporate restructuring, the long-term impact will depend on the successful implementation of the merger and realization of the anticipated benefits.