Indo Count Industries Ltd (ICIL) Q2 FY27 Earnings Call: To Exceed Rs. 5,500 Cr Revenue Guidance, Reaffirms Rs. 8,000 Cr CY28 Target

Record Quarter With Broad-Based Profitability Inflection

• Highest-ever quarterly performance — Q2 FY27 total income of Rs.1,699 crores vs Rs.1,082 crores in Q2 FY26, up 57% YoY and 30% sequentially; H1 FY27 total income of Rs.2,923 crores, up 42% YoY (CFO Manish Bhatia).
• EBITDA more than doubled YoY — Q2 FY27 EBITDA of Rs.259 crores vs Rs.123 crores, with margin up 380 bps to 15.3%; H1 FY27 EBITDA grew 23% to Rs.420 crores at 14.4% margin.
• PAT grew 2.5x YoY — Q2 FY27 consolidated PAT of Rs.132 crores vs Rs.39 crores; H1 FY27 PAT of Rs.195 crores vs Rs.78 crores, up 150%.
• Margin drivers — management attributed expansion to sweating existing assets, higher capacity utilization, better cost absorption, and operational efficiencies.
• Balance sheet at best-ever levels — net debt declined to Rs.518 crores (lowest ever) with net debt-to-equity at 0.2x; cash rose to Rs.315 crores vs Rs.114 crores at March 2026; annualized RoC of 21.4% and ROE of 15.3% in H1 FY27.
• Bhilad flood impact — inventory loss of Rs.45 crore 2 lakhs (net of salvage) recognized as an exceptional item with an equivalent insurance claim; the insurance company approved an interim payment of Rs.14 crore 99 lakhs after quarter end, pending final settlement.

Management Exceeds FY27 Guidance; CY28 Doubling Target Reaffirmed

• FY 2026-2027 guidance to be exceeded — management expects to surpass the Rs.5,500 crore revenue guidance set before the year began, on top line, bottom line, and EBITDA percentage, based on H1 FY27 performance.
• H1 tracking ahead — H1 FY27 volume of 51 million meters is ~49% of the FY27 guidance of 105-110 million meters; H1 total income of Rs.2,923 crores is ~52% of the Rs.5,500 crore guidance; H1 EBITDA margin of 14.4% already exceeds the 13% FY27 guidance.
• CY28 doubling target reaffirmed — Mohit Jain confirmed the target to double revenue from Rs.4,000 crore in FY25 to Rs.8,000 crore by calendar year 2028 (not fiscal 2028), with no growth capex needed to reach it.
• Blended EBITDA margin guided at 13% for FY 2026-2027 — management expects to exceed this; margin could improve from 13% to 14-15% in FY27, and management declined an analyst's suggestion of an 18-20% range.
• Volume recovery — FY25 closed at ~106 million meters (actual); FY 2026-2027 volume is expected to return to almost the same level, from US and non-US businesses "both put together."
• FY30 doubling ask not committed — analyst Jiten Doshi (Inam Asset Management) framed Rs.10,000 crore+ top line with 20% EBITDA margin by FY30 as his shareholder expectation; management said it will "work towards achieving greater" without committing to a new target, and FY 2027-2028 guidance will come later.

New Businesses Scale Up; Non-US Growth and FTA Tailwinds

• New businesses at ~Rs.502 crores in Q2 FY27 — ~30% of total income, already at 60% of the FY27 revenue guidance; portfolio spans utility bedding, branded business, quilts, comforters, blankets, towels, and curtains.
• Segment progress vs FY27 targets — core business H1 FY27 revenue of Rs.2,033 crore is ~50% of the Rs.4,000 crore target; new businesses H1 revenue of Rs.890 crores is nearly 60% of the ~Rs.1,500 crores target.
• Geographic mix — core non-US business is ~30% of core revenue currently (US ~70%); core non-US business is growing at ~20%, and management expects over 20% non-US revenue growth in FY27.
• Mix shift outlook — Mohit Jain said the core-business US:non-US ratio should change from 70:30 toward 60:40 over the next 3 years (through ~FY 2029-2030), while cautioning management does not want to put a specific number on it right now.
• UK FTA implemented July 2026 — roughly 3-4 months in, management is seeing much better customer interactions with a large number of UK inquiries, though conversion into final volumes has no specified timeline; the EU FTA is yet to take effect.
• Branded momentum via Vamsutta — new-business mix remains 2/3 utility and 1/3 branded; the sharp branded improvement was driven by Vamsutta, which expanded beyond direct-to-consumer into broader US retail markets in Q2 FY27.

Capacity Headroom With Disciplined Capex Phasing

• US utilization at 65% — all three US utility bedding facilities (not just the greenfield) are operating above 65% as of Q2 FY27; management seeks to reach full 100% utilization by CY28.
• Core utilization ~73% — per analyst Ashish Manwari (Nuvama) as of Q2 FY27; management said there is still capacity headroom and the board will decide on further capex at the appropriate time.
• FY27 capex of Rs.250 crores over 12-18 months — only ~Rs.40 crores deployed in H1 FY27; Mohit Jain clarified the guidance was on a 12-18 month execution timeline, so the full Rs.250 crore will not be spent during FY 2026-2027.
• Project phasing — the spinning project is expected to be mostly completed within FY 2026-2027, while the effluent treatment project will likely spill into FY 2027-2028; no specific split quantified.
• New business margins at lower double digits — currently ~11-12% (Q2 FY27); management expects margins to reach core business levels of 15% once full scale/full utilization is achieved (period unspecified), driven by manufacturing operations and more products sold under brands.
• Deleveraging to continue — management expects net debt reduction from incoming cash profits after the announced capexes, though no quantum or timeline was specified; Anil Kumar Jain noted the company has historically reduced debt whenever surplus/free cash flows were generated.

Cotton Inflation Cushioned; Realization Gains From Mix, Not Tariff Refunds

• Cotton prices rising — Anil Kumar Jain confirmed cotton and cotton-related product prices have been rising; the company maintains a 4-5 month inventory buffer as a cushion before approaching customers for price increases.
• Pass-through mechanics — Mohit Jain explained the 4-5 month buffer combined with a cost pass-through lag of 1-2 quarters means rising input costs will not have a major impact on profitability or margins; CFO Manish Bhatia said the impact of previous raw material increases has already been passed on to customers.
• No margin pressure expected in H2 FY 2026-2027 — management stated seeking price increases from customers on significant input cost rises is normal business practice.
• Freight largely customer-borne — the company does most business on FOB or CIF terms, so freight hikes are borne by the customer, resulting in very limited impact; management declined to divulge component-level H1 bridge percentages (price hikes, currency, yarn costs).
• Realization jump is mix-driven, not tariff refunds — management clarified the sharp Q2 FY27 realization improvement does not include any US tariff refunds and is attributed to operating efficiencies and execution of higher-value product orders.
• Working capital improved — management stated the working capital cycle has improved from March 2026, with days down by at least 3 weeks as of 30 September 2026.
• Gross margin volatility — Q2 FY27 gross margin declined even as EBITDA improved; Mohit Jain attributed quarterly GP fluctuations to product mix and advised evaluating GP on an annual basis, with GP margins expected at 50-55% annualized (period unspecified).

Healthy Order Book Underpins Guidance; Macro Variables Open

• Order book healthy — management explicitly cited the healthy order book position as the reason FY 2026-2027 guidance stays put, and feels business will remain as normal as before.
• US midterm election results too recent to assess — Anil Kumar Jain said the results were too recent to comment on, but management is positive overall on the US operating environment.
• Branded target retained — branded business guidance retained at 100 million by CY28 despite the planned Vamsutra expansion and newly licensed Tommy Hilfiger brands; management will assess whether any uptick is possible.
• Core EBITDA ahead of guidance — Anil Kumar Jain reiterated the ~15% core-business EBITDA guidance given at the start of FY 2026-2027 and said Q2 FY27 core EBITDA margin came in better than 15%; new businesses are expected to reach margin parity with core over the next two-three quarters (~Q1 FY 2027-2028).
• Q2 growth drivers — Mohit Jain attributed the bumper YoY performance to both market share gains and customer wallet share gains.