NewsEarningsModern Threads Reports 21.5% Revenue Growth Amid Profitability Challenges in Q1 FY2026Modern Threads Reports 21.5% Revenue Growth Amid Profitability Challenges in Q1 FY2026
Modern Threads (India) Limited reported a 21.5% increase in total income to Rs. 7161.39 lakhs for Q1 FY2026. Revenue from operations grew by 20.3% to Rs. 6986.41 lakhs. However, net profit after tax declined sharply to Rs. 0.63 lakhs from Rs. 18.38 lakhs in Q1 FY2025. EBITDA margin contracted to 0.4% from 1.4% year-over-year. The company attributes revenue growth to improving domestic demand but faces profitability pressures due to elevated input costs. Management is focusing on operational efficiencies, product mix enhancement, cost optimization, and exploring new export markets to address these challenges.
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Modern Threads (India) Limited, a textile company, has reported a significant increase in revenue for the first quarter of fiscal year 2026, despite facing challenges in profitability. The company's financial results for Q1 FY2026 reveal a mixed performance, with strong top-line growth offset by margin pressures.
Revenue Growth and Financial Highlights
Modern Threads reported a total income of Rs. 7161.39 lakhs for Q1 FY2026, marking a substantial 21.5% increase from Rs. 5893.28 lakhs in the corresponding quarter of the previous year. The company's revenue from operations grew by 20.3% to Rs. 6986.41 lakhs, indicating robust demand for its textile products.
Profitability Challenges
Despite the strong revenue growth, the company faced significant challenges in maintaining profitability:
- Net profit after tax declined sharply to Rs. 0.63 lakhs, compared to Rs. 18.38 lakhs in Q1 FY2025.
- EBITDA margin contracted to 0.4% from 1.4% year-over-year, reflecting increased cost pressures.
Key Financial Metrics
| Particulars | Q1 FY2026 (Rs. lakhs) | Q1 FY2025 (Rs. lakhs) | YoY Change |
|---|---|---|---|
| Total Income | 7161.39 | 5893.28 | +21.5% |
| Revenue from Operations | 6986.41 | 5805.24 | +20.3% |
| Net Profit After Tax | 0.63 | 18.38 | -96.6% |
| EBITDA Margin | 0.4% | 1.4% | -100 bps |
Management Commentary and Outlook
The management of Modern Threads attributed the strong revenue growth to improving domestic demand in their textile business. However, they noted that profitability was under pressure due to elevated input costs.
To address these challenges, the company is focusing on several strategic initiatives:
- Improving operational efficiencies
- Enhancing product mix with value-added offerings
- Implementing cost optimization measures
- Exploring new export markets
The management expects revenue growth momentum to continue but remains cautious about the margin outlook due to ongoing input cost pressures.
Conclusion
While Modern Threads (India) Limited has demonstrated strong revenue growth in Q1 FY2026, the company faces significant challenges in maintaining profitability. The management's focus on operational improvements and market expansion will be crucial in navigating the current economic environment and improving bottom-line performance in the coming quarters.
Historical Stock Returns for Modern Threads
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -3.70% | -2.52% | +21.64% | +34.72% | -13.94% | +161.29% |
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