Iris Clothings

Iris Clothings reported a robust FY25 with consolidated income growing 20.1% YoY to INR 146.6 crores, up from INR 122 crores in FY24. Operational profitability also saw significant improvements, with FY25 EBITDA at INR 28.3 crores and an EBITDA margin of 19.3%. However, Q4 FY25 saw a slight dip in total income to INR 40.3 crores from INR 42.1 crores in Q4 FY24, attributed to a sudden demand drop and margin pressures from higher input costs. Despite this, Q4 PAT grew 28.6% YoY to INR 4.5 crores.

The company significantly expanded its market reach in FY25 by adding 21 new distributors, bringing the total count to 186. Management aims to further grow this network to 210-215 distributors by the end of the current year. Additionally, five new exclusive brand outlets (EBOs) were opened during the year, contributing to enhanced market presence and customer engagement, particularly noting a sales spike in the Eastern zone during Durga Puja.

FY25 marked the successful launch of a new line of winter sportswear for kids, which has been well-received for its quality and innovation. Building on this, Iris Clothings plans to introduce a new innerwear line in Q3 and Q4 of FY26, targeting INR 6-7 crores in revenue from this segment. This strategic move aims to capitalize on the strong demand in the kids' innerwear market, which currently has few branded organized players.

In April 2025, Iris Clothings successfully concluded a rights issue, raising INR 47.5 crores. These proceeds are primarily earmarked for working capital requirements, with a portion allocated to general corporate affairs, including branding, and some incremental capex. This capital infusion is intended to enhance operational efficiency and accelerate business growth, enabling the company to pursue new market opportunities.

For FY26, Iris Clothings is targeting a robust 30-35% revenue growth, aiming for a total revenue of INR 200-210 crores. This growth will be supported by an incremental capex of INR 6-7 crores to expand production capacity from 34,000 to 38,000-39,000 pieces per day. The long-term vision for 2030 is to become one of India's biggest kidswear brands, with plans for over 300 distributors and EBOs, and sustained 30%+ growth rates.

While Q4 FY25 experienced margin pressures due to increased yarn costs in December and January, management noted that these costs have since stabilized and are expected to remain flattish. The company aims to maintain an overall EBITDA margin of approximately 20% for FY26. Furthermore, store-level EBITDA, currently at 10-15%, is projected to reach around 20% with increased scale and operational efficiencies.

Iris Clothings is adopting a cautious and research-driven approach to its retail expansion. The company plans to open 3-4 new stores in Q1 FY26 and is actively building a dedicated team and engaging consultants to refine its retail rollout strategy. A more concrete update on the retail roadmap is expected in the next quarter, as the company focuses on identifying optimal geographical areas for expansion.