IRISDOREME - Iris Clothings

📊 NSE: IRISDOREME 🏢 Textiles - Products 📅 Last Updated: 12/14/2025 8:27

💰 Financial Performance

Revenue Growth by Segment

Total operating income grew by 20.07% in FY25 to reach INR 146.39 Cr, up from INR 121.92 Cr in FY24. For H1 FY26, revenue from operations reached INR 81.7 Cr, representing a 12% YoY growth compared to INR 72.7 Cr in H1 FY25, driven by steady demand for kids' garments.

Geographic Revenue Split

The company is heavily concentrated in Eastern India, currently operating 7 Exclusive Brand Outlets (EBOs), with 6 located in West Bengal and 1 in Jharkhand. Revenue is primarily driven by these regions as the company expands its retail footprint.

Profitability Margins

PAT margins were 8.96% in FY25, a slight decline from 10.02% in FY24. For H1 FY26, PAT margin stood at 8.3% (INR 6.7 Cr) compared to 8.6% (INR 6.2 Cr) in H1 FY25. Gross profit margins for H1 FY26 were 40.2%, down from 46.4% YoY, reflecting higher cost of goods sold.

EBITDA Margin

EBITDA margin for H1 FY26 was 15.1% (INR 12.3 Cr), a decrease from 19.3% (INR 14.0 Cr) in H1 FY25. This 420 basis point compression was primarily attributed to increased investments in growth initiatives and retail expansion.

Capital Expenditure

The company plans rapid expansion of its EBO network. While specific INR figures for future CapEx are not disclosed, credit rating factors indicate that any large, debt-funded capital expenditure exceeding current cash accruals (INR 18-20 Cr) would be a key monitorable for financial stability.

Credit Rating & Borrowing

CRISIL reaffirmed a 'CRISIL BBB-/Stable' rating on bank facilities as of November 2025. The rated amount was enhanced to INR 40 Cr. Interest coverage ratio stood at 6.69 times in FY25, indicating a strong ability to service debt despite a slight decline from 6.85 times in FY24.

⚙️ Operational Drivers

Raw Materials

Fabric and textiles represent the primary raw material for readymade garments, though specific percentage of total cost is not disclosed. COGS for H1 FY26 was INR 48.9 Cr, representing 59.8% of total revenue.

Import Sources

Not disclosed in available documents; however, manufacturing is centralized at a 100% in-house facility in Howrah, West Bengal.

Capacity Expansion

The company operates a 100% in-house manufacturing unit in Howrah. Expansion is focused on the retail front, moving from 6 EBOs in FY24 to 7 EBOs by mid-FY26, with plans for rapid further expansion to strengthen the retail segment.

Raw Material Costs

Cost of Goods Sold (COGS) increased to INR 48.9 Cr in H1 FY26 from INR 39.1 Cr in H1 FY25, a 25% increase, significantly outpacing revenue growth and impacting gross margins.

Manufacturing Efficiency

The company leverages the extensive 15+ years of experience of its promoters (Santosh, Geeta, and Baldev Ladha) to maintain a sound operating margin of ~19-21% through efficient in-house production.

Logistics & Distribution

Distribution is managed through a mix of 7 EBOs and established market channels for the DOREME brand; specific costs are not disclosed.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

The company aims to achieve growth by rapidly expanding its Exclusive Brand Outlet (EBO) network beyond West Bengal and Jharkhand. It focuses on the 'DOREME' brand value to command premium pricing and utilizes its 100% in-house manufacturing to scale production without relying on third-party vendors.

Products & Services

Readymade garments for kids, specifically kids' casual-wear.

Brand Portfolio

DOREME

New Products/Services

Expansion into new retail segments through EBOs is expected to contribute to a target revenue increase of over 20-25% to trigger a credit rating upgrade.

Market Expansion

Targeting rapid expansion in the retail segment by increasing the number of EBOs beyond the current 7 locations in West Bengal and Jharkhand.

🌍 External Factors

Industry Trends

The kids' wear industry is characterized by intense competition and a shift toward branded retail. IRISCL is positioning itself by transitioning from a manufacturing-heavy model to an EBO-led retail model to capture higher margins.

Competitive Landscape

The readymade garment industry is highly fragmented with intense competition from both organized and unorganized players, which limits the company's ability to scale turnover rapidly beyond the current INR 146 Cr level.

Competitive Moat

The company's moat consists of its established 'DOREME' brand and 100% in-house manufacturing. This vertical integration is sustainable as it provides a 15-20% margin cushion and protects against supply chain disruptions common in outsourced garment manufacturing.

Macro Economic Sensitivity

The business is sensitive to consumer discretionary spending in the kids' apparel segment; however, specific GDP sensitivity percentages are not provided.

Consumer Behavior

There is a steady demand for branded kids' casual wear, which has supported a 12% YoY revenue growth in H1 FY26 despite broader economic pressures.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. It maintains proper records for Property, Plant, and Equipment and Intangible Assets as per statutory requirements.

Taxation Policy Impact

The effective tax rate for H1 FY26 was approximately 25.7% (INR 2.33 Cr tax on INR 9.08 Cr PBT).

Legal Contingencies

The National Stock Exchange (NSE) imposed a fine of INR 50,000 for a delay in submitting related party disclosures for the half-year ended March 31, 2022. No other major pending court cases or case values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the management of the working capital cycle; a decline in net cash accruals below INR 5 Cr (from the current ~INR 19 Cr) would trigger a downward rating action.

Geographic Concentration Risk

High concentration in West Bengal, where 6 out of 7 EBOs are located, making the company vulnerable to regional economic downturns or regulatory changes in that state.

Third Party Dependencies

Low dependency on third-party manufacturers due to 100% in-house production facility.

Technology Obsolescence Risk

The company has implemented audit trail requirements as per the Companies (Accounts) Rules, 2014, effective April 1, 2023, to modernize financial record-keeping.