Iris Clothings Limited held its Q4 & FY25 Earnings Conference Call on May 16, 2025.

Financial Highlights:

• Consolidated income for FY25 grew by 20.1% year-on-year to ₹146.6 crores, up from ₹122 crores in FY24.
• EBITDA for FY25 was ₹28.3 crores (margin 19.3%), compared to ₹26.4 crores (margin 21.6%) in FY24.
• Net profit for FY25 was ₹13.1 crores (margin 8.9%), compared to ₹12.2 crores (margin 10%) in FY24.
• For Q4 FY25, total income was ₹40.3 crores, compared to ₹42.1 crores in Q4 FY24.
• Q4 FY25 EBITDA grew by 15.8% year-on-year to ₹8.2 crores (margin 20.4%), up from ₹7.1 crores in Q4 FY24.
• Q4 FY25 Profit After Tax grew by 28.6% year-on-year to ₹4.5 crores, up from ₹3.5 crores in Q4 FY24.

Business Updates & Future Plans:

• The Board approved the issuance of bonus equity shares in a one-to-one ratio (1:1 bonus share of ₹2 face value for each existing share).
• In FY25, the company added 21 new distributors, bringing the total count to 186.
• A new line of winter sportswear for kids was successfully launched in FY25.
• Five new exclusive brand outlets were opened during FY25, reflecting progress in the retail strategy.
• A rights issue was concluded in April 2025, raising ₹47.5 crores to enhance operational efficiency and accelerate growth.
• Looking ahead to FY26, the company plans to expand production capacity to approximately 38,000 pieces per day (from 34,000), with an estimated capex of ₹6-₹7 crores.
• A much bigger capacity expansion (2.5x current) is being planned for the future.
• Iris Clothings plans to introduce a new innerwear line and enhance sportswear offerings in FY26.
• Exports were around 3% of revenue in FY25, targeted to be around 5% in FY26, with focus on countries like UAE, Dubai, Saudi Arabia, and Mozambique.
• E-commerce, primarily through FirstCry, contributed about 10% of revenue in FY25.
• The company targets increasing the distributor count from 186 to around 210-215 by the end of FY26.
• Around 3-4 new stores are planned to be opened in Q1/Q2 FY26, while the retail rollout strategy is being further defined.
• Management expects to achieve around 30%-35% revenue growth in FY26, targeting revenues of ₹200-₹210 crores.
• EBITDA margins are expected to remain around the 20% level for the overall year.

Management Commentary:

• Mr. Harshvardhan Sarda noted robust revenue growth throughout FY25 and significant improvements in operational profitability despite Q4 margin pressures from higher input costs (yarn).
• He mentioned a sudden drop in demand in Q4 but saw a decent recovery in April 2025.
• The company is very confident of achieving 30%-35% growth in FY26 driven by organic demand and new capacity additions.
• Management is excited about the opportunity in the Indian kidswear market and aims to be at the forefront of organizing the unorganized market.
• By 2030, the company expects to be one of the biggest kidswear brands in India, targeting over 300 distributors and 300 EBOs, maintaining a 30%+ growth rate over the next few years.