Dollar Industrie

Dollar Industries Limited delivered a strong Q2 FY26, with operating income growing 5.6% year-on-year to ₹471 crores. Operating EBITDA saw a healthy 23.3% YoY growth, reaching ₹60.3 crores, and margins expanded by 183 basis points to 12.8%. Profit after tax increased 32.7% YoY to ₹35.2 crores, resulting in a PAT margin of 7.4%. For the first half of FY26, operating income grew 11.6% YoY to ₹871 crores, and PAT increased 35.1% YoY to ₹56.5 crores.

The quarter marked a significant strategic milestone with the proposed merger of nine promoter group companies into the listed entity. This restructuring consolidates the 'Dollar' brand fully under Dollar Industries Limited, eliminating structural overlaps and reducing related party transactions. The merger is expected to yield monetary gains of ₹5-6 crores currently, primarily from savings in rent, compliance, employee expenses, and royalty, with no goodwill recognized post-merger.

Key product categories showed resilient momentum in Q2 FY26. Thermals delivered a standout performance with 23.5% value and 28.1% volume growth YoY. The premium innerwear line, Force NXT, grew 6% in value and 19.2% in volume. The kids' range, Champion, posted exceptional gain^📎s with 109.4% value and 73.9% volume growth. The company's premiumization strategy continues to gain traction, with the premium segment delivering 25.1% volume growth YoY.

Modern trade, e-commerce, and quick-commerce channels contributed 10.2% to overall revenue in Q2 FY26. Quick-commerce, despite its small base, scaled sharply to contribute 4% of total sales, enhancing visibility and consumer access. The company aims to expand its active retail outlet base to 2.5 lakh in the next couple of years, focusing on a blend of adding new outlets with basic products and increasing SKUs in existing ones.

Working capital saw an improvement this quarter, with receivable days reducing to 116, inventory days moderating to 119, and payable days increasing to 68. This resulted in a cash conversion cycle improvement to 167 days from 173 days in June. Net debt stood at ₹322.2 crores as of September '25, with a comfortable net debt to equity ratio of 0.36 and net debt to EBITDA of 1.56. Management targets to reduce net debt by ₹40-50 crores by year-end.

For FY26, the company targets revenue growth of 11-12% and an EBITDA margin of 12-13%, with a long-term goal of 14% EBITDA margin. Advertisement spend is projected to be ₹80-85 crores for FY26 and ₹85-95 crores for FY27. Management expects to reduce the cash conversion cycle by 10-15 days by year-end and anticipates picking up the pace of Project Lakshya rollout in the next 1-2 quarters, despite current competitive intensity.