DOMS Industries Q2 Results: Flood damage, exceptional expense drag profit down to 36%

Stationery and art material maker DOMS Industries Ltd on Monday (November 2) reported a 36.2% year-on-year (YoY) decline in net profit to ₹37.2 crore for the second quarter of FY27, compared with ₹58.3 crore in the corresponding quarter last year. The decline was primarily due to an exceptional expense of ₹10.4 crore arising from damage caused by heavy rainfall and flooding.

Revenue increased 17.6% to ₹668 crore from ₹568 crore in the year-ago period. The company said revenue growth was driven by volume growth in domestic and export markets, year-on-year capacity additions, new product launches and marginally higher average selling prices (ASPs) following calibrated pricing actions to partially offset raw material inflation.

However, inventory damage due to exceptionally heavy rainfall and flooding resulted in an estimated loss of 300-350 basis points in sales growth during the quarter.

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Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 16.9% to ₹82.7 crore from ₹99.5 crore. EBITDA margin contracted to 12.4% from 17.5% in the corresponding quarter last year, although it improved sequentially from 12.3% in Q1FY27.

Consumption margins improved sequentially, supported by softer raw material prices during the early part of the quarter. However, this benefit was partly offset by a sharp increase in input costs in the latter half of the quarter.

The company also reported higher employee expenses due to the temporary under-absorption of fixed overheads of the Reynolds team, following the transitory impact during the commencement of production. This marginally affected EBITDA margins.

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PAT margin stood at 5.7% in Q2FY27, compared with 10.7% in the corresponding quarter last year. DOMS Industries said it had lodged insurance claims for the damage caused by heavy rainfall and flooding, and the associated recovery is expected to substantially offset the financial impact in due course.

First Half

For the first half of FY27, revenue from operations increased 18.4% to ₹1,338.3 crore from ₹1,130.2 crore in H1FY26, in line with the company's yearly guided range.

EBITDA declined 16.6% to ₹165.3 crore from ₹198.3 crore, while the EBITDA margin stood at 12.4%, compared with 17.5% in the year-ago period. PAT fell 30.3% to ₹83.6 crore from ₹120 crore in H1FY26. PAT margin contracted to 6.2% from 10.6% in the corresponding period last year.

Santosh Raveshia, Managing Director, DOMS Industries Ltd said, "We reported another quarter of sustained growth, with revenue increasing by 17.6% year-on-year in Q2’FY27 and 18.4% in H1’FY27.

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This growth was supported by healthy volume expansion across both domestic and export markets, reflecting the strength of our brands, the benefits of ongoing capacity expansion, and a continued positive market response to our new product launches.

Growth during the quarter was broad-based, with all our key categories delivering positive performance. Our Scholastic Stationery, Scholastic Art Material and Office Supplies businesses continued to benefit from healthy underlying demand, while Hobby & Craft maintained strong momentum, supported by portfolio expansion and increased manufacturing capacity. The Back-to-School category also delivered robust growth.

The quarter also presented certain external challenges. Unusually heavy rainfall and flooding in Gujarat affected sales growth by an estimated 300–350 basis points. In addition, raw material prices remained volatile amid ongoing geopolitical uncertainties. Despite these headwinds, we maintained our EBITDA margin at 12.4%, in line with the previous quarter.

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I am pleased to share that we have achieved a significant milestone with the commissioning of the first building at our new 50-acre manufacturing facility. Dedicated to Reynolds pen production, this building is expected to begin contributing to revenues from Q3 FY27 onwards, marking an important step in our long-term capacity expansion roadmap."

Shares of DOMS Industries Ltd ended at ₹1,832.00, up by ₹6.90, or 0.38%, on the BSE.