Rupa & Company , a leading Indian innerwear manufacturer, reported a mixed financial performance for the second quarter of fiscal year 2026, with revenue growth accompanied by margin pressure due to an aggressive pricing strategy.

Revenue and Volume Growth

The company recorded an 8% year-on-year revenue growth to INR 320.00 crores in Q2 FY26, primarily driven by a robust 14% volume growth. This growth was largely attributed to strong traction in the economy and mid-premium segments, with the company adopting a calibrated pricing approach to compete effectively in the market.

Margin Pressure and Profitability

Despite the revenue growth, Rupa & Company faced margin pressure during the quarter:

The decline in profitability was primarily due to the company's aggressive pricing strategy aimed at maintaining competitiveness in the market. The gross margin saw a dip of 140 basis points, while advertising spend increased by 60 basis points.

Segment Performance

• Thermalwear: Contributed 13% to quarterly revenues, showing a strong volume growth of 23-24%.
• Exports: Delivered a 28% year-on-year growth, contributing 4% to H1 FY26 revenues.
• Modern Trade and E-commerce: Maintained steady momentum, contributing 8% to H1 revenues.
• Athleisure: Contributed around 8% to Q2 revenues, with a volume and value growth of approximately 13%.

Strategic Initiatives

Rupa & Company is focusing on several initiatives to drive growth and improve profitability:

1. Increased marketing reach and strengthening of the sales and marketing team.
2. Appointment of an e-commerce head and an Exclusive Brand Outlet (EBO) head.
3. Launch on Amazon.com through an aggregator.
4. Introduction of a kiosk for the infant brand, Peek-A-Boo.
5. Strengthening presence in large retail chain format stores like Style Bazaar and City Style.

Outlook

While the company faces intense competition and margin pressure in the short term, management remains optimistic about future growth prospects. Key focus areas include:

• Maintaining volume-led growth in the near term.
• Restoring margin balance through mix optimization and operational efficiency.
• Targeting at least 14-15% growth in the athleisure segment for the fiscal year.
• Aiming for a 20% growth in modern trade and e-commerce channels.
• Expecting expanded contribution from thermalwear in the upcoming winter season.

Rupa & Company's management reaffirmed its commitment to the original guidance of 10% revenue growth by the end of the fiscal year, balancing aggressive pricing with strategic marketing initiatives to drive volume growth and market share.

As the competitive landscape evolves, Rupa & Company continues to adapt its strategies to maintain its market position while working towards improving profitability in the coming quarters.

Rupa & Company Limited , a leading Indian hosiery and knitwear brand, has reported a mixed financial performance for the second quarter of fiscal year 2026 (Q2FY26). The company achieved revenue growth but faced margin pressure due to its aggressive pricing strategy aimed at driving market competitiveness.

Key Financial Highlights

• Revenue Growth: Rupa & Company reported an 8% year-on-year increase in revenue, reaching Rs 320.00 crores in Q2FY26.
• Volume Growth: The company experienced a robust 14% volume growth, primarily driven by strong performance in the Economy and Mid Premium segments.
• EBITDA Margin: The EBITDA margin compressed to 7.00% in Q2FY26, down from 9.60% in the same quarter of the previous year.
• Cash Flow: For the half-year, the company maintained a positive operating cash flow of Rs 23.00 crores.
• Net Cash Position: As of September 2025, Rupa & Company holds a net cash surplus of Rs 18.00 crores.

Segment Performance

The company's growth was primarily driven by strong traction in the Economy and Mid Premium segments. While the Mid Premium segment lagged behind the Economy segment in growth pace, management indicated a focus on reigniting momentum in this category to restore contribution balance and improve margin mix.

Strategic Initiatives

Rupa & Company has implemented an aggressive pricing strategy to drive sales volume and enhance overall market competitiveness. This approach, while successful in boosting volume growth, has put pressure on the company's margins.

Management Commentary

Mr. Vikash Agarwal, Whole Time Director of Rupa & Company, commented on the results: "The quarter witnessed a steady recovery trajectory with encouraging signs across key categories, reflecting our focused execution and strategic agility." He added, "To strengthen our market presence, we pursued an aggressive pricing policy designed to drive sales volume and improve overall competitiveness."

Future Outlook

Looking ahead, Rupa & Company's strategic priorities include:

1. Reigniting growth in the mid-premium and premium segments
2. Strengthening the product mix
3. Enhancing distribution effectiveness to drive profitable growth

Management expressed confidence in sustaining growth momentum and building long-term value for stakeholders, leveraging the company's diversified brand portfolio and deep-rooted market presence.

Conclusion

While Rupa & Company has demonstrated strong volume growth and increased revenue, the pressure on margins highlights the challenges of balancing market share growth with profitability. The company's focus on revitalizing its mid-premium segment and improving its product mix will be crucial in navigating the competitive landscape and achieving sustainable, profitable growth in the coming quarters.