💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for H1 FY26 (ended Sept 30, 2025) was INR 39.05 Cr. The Garment segment generated INR 25.24 Cr (64.6% of total), declining 5.02% YoY from INR 26.58 Cr. The Rock Salt segment generated INR 13.81 Cr (35.4% of total), growing 10.51% YoY from INR 12.50 Cr.

Geographic Revenue Split

The company operates in India and the UAE. The UAE subsidiary, Libas Consumer Products Limited FZE LLC, contributed INR 6.88 Cr to revenue in Q2 FY26, representing approximately 33% of the consolidated quarterly revenue of INR 20.85 Cr.

Profitability Margins

Standalone FY25 net margin was -2.87% (Net Loss of INR 1.57 Cr on revenue of INR 54.94 Cr). Q2 FY23 PAT margin was 13.6%, improving from 13.4% YoY. However, consolidated H1 FY26 showed a PBT loss of INR 0.55 Cr compared to a profit of INR 2.94 Cr in the previous year, primarily due to exceptional items of INR 2.40 Cr.

EBITDA Margin

EBITDA margin in Q2 FY23 was 16.3%, a decrease from 19.0% in Q2 FY22. This decline was driven by a 47.6% increase in operating expenses (INR 23.55 Cr vs INR 15.96 Cr) which outpaced the 42.8% revenue growth.

Capital Expenditure

Standalone Property, Plant and Equipment (PPE) stood at INR 1.05 Cr as of March 31, 2025, a decrease from INR 1.15 Cr in FY24, indicating minimal new capital investment and a reliance on existing fabrication infrastructure.

Credit Rating & Borrowing

The company held a CARE BB+ (Stable) rating for bank facilities totaling INR 11.14 Cr. Standalone finance costs for FY25 were INR 1.36 Cr on borrowings of INR 12.68 Cr, implying an average interest rate of approximately 10.7%.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include Fabric (for garment fabrication) and Rock Salt (for the consumer products division). Fabric costs are the largest component, with total standalone cost of materials consumed reaching INR 48.93 Cr in FY25, or 89% of revenue.

Import Sources

The company sources materials domestically in India and utilizes its UAE-based subsidiary (Ajman, UAE) for international operations and potentially for sourcing/trading activities in the Middle East.

Key Suppliers

Not specifically named in the documents, but the company relies on a fragmented network of fabric suppliers and rock salt miners/distributors.

Capacity Expansion

Current operations focus on fabrication through customization. While specific MTPA/unit capacity is not disclosed, the company has expanded its business scope from 'Libas Designs' to 'Libas Consumer Products' to include Rock Salt distribution.

Raw Material Costs

Standalone raw material costs were INR 48.93 Cr in FY25, up 10.1% from INR 44.44 Cr in FY24. The high cost-to-revenue ratio (89%) leaves the company highly sensitive to fluctuations in fabric prices.

Manufacturing Efficiency

Manufacturing is primarily 'fabrication through customization.' Efficiency is impacted by inventory management, with a significant inventory write-down of INR 3.00 Cr recorded in FY25.

Logistics & Distribution

Distribution costs are part of operating expenses; the expansion into Rock Salt (INR 13.81 Cr H1 FY26 revenue) has increased the logistical complexity compared to the bespoke garment business.

📈 Strategic Growth

Expected Growth Rate

42.80%

Growth Strategy

Growth is driven by diversification into the Rock Salt segment, which now accounts for 35% of consolidated revenue. The company is also leveraging its UAE subsidiary (FZE LLC) to capture international market share, contributing INR 6.88 Cr in quarterly revenue.

Products & Services

Custom-made garments (men's suits, ethnic wear, wedding attire) and Rock Salt consumer products.

Brand Portfolio

Riyaz Gangji Libas, Libas Consumer Products.

New Products/Services

The shift into Rock Salt products is the primary new revenue driver, contributing INR 13.81 Cr in H1 FY26.

Market Expansion

Expansion into the Middle East via the Ajman, UAE subsidiary, which is already generating significant revenue (INR 6.88 Cr in Q2 FY26).

Market Share & Ranking

Not disclosed; the company operates in a 'highly competitive and fragmented industry' as per credit rating reports.

Strategic Alliances

The company operates a wholly-owned subsidiary, LIBAS CONSUMER PRODUCTS LIMITED FZE LLC, in the UAE to manage international trade and operations.

🌍 External Factors

Industry Trends

The industry is shifting toward diversified consumer goods. Libas is positioning itself by moving from a pure-play fashion house to a broader consumer products company, growing its non-garment revenue to 35% of the total.

Competitive Landscape

Competes with other designer labels and large ethnic wear retailers (e.g., Manyavar) as well as unorganized local tailors and fabricators.

Competitive Moat

The moat is based on the 'Riyaz Gangji' brand and the niche of custom fabrication. However, this is a 'narrow moat' as it is highly dependent on brand reputation and faces intense competition from both organized and unorganized players.

Macro Economic Sensitivity

Highly sensitive to consumer discretionary spending in India; a slowdown in the wedding or luxury retail market would directly reduce demand for custom garments.

Consumer Behavior

Increasing demand for branded ethnic wear and specialized consumer health products (Rock Salt) is driving the current segment mix.

Geopolitical Risks

Operations in the UAE (Ajman) expose the company to Middle Eastern trade regulations and regional economic stability.

⚖️ Regulatory & Governance

Industry Regulations

Subject to textile manufacturing standards and food safety regulations for the Rock Salt segment. Compliance with SEBI Listing Obligations (Regulation 33) is mandatory for its NSE SME listing.

Environmental Compliance

Not disclosed; however, the company must comply with textile processing and food-grade standards for its Rock Salt division.

Taxation Policy Impact

The company provided for current tax of INR 0.14 Cr in H1 FY26. Standalone FY25 saw a tax adjustment of INR 0.29 Cr for earlier years.

Legal Contingencies

The documents do not list specific pending court cases or case values in INR, though they mention standard internal control and audit procedures.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of the Garment segment, which saw a 5% revenue decline in H1 FY26. Exceptional items (INR 2.40 Cr) frequently impact bottom-line stability.

Geographic Concentration Risk

Approximately 67% of revenue is derived from India, with 33% from the UAE, providing some geographic diversification but high dependence on these two markets.

Third Party Dependencies

High dependency on third-party fabricators and suppliers, as the company's own PPE is relatively small (INR 1.05 Cr) compared to its revenue scale.

Technology Obsolescence Risk

Low risk of technical obsolescence, but high risk of 'fashion obsolescence,' necessitating the INR 3.00 Cr inventory write-down in FY25.

Credit & Counterparty Risk

Trade receivables are high at INR 29.36 Cr (Standalone, March 2025), representing over 50% of annual revenue, indicating significant credit risk and potential for bad debts.