Sreeleathers delivered steady growth in Q2 FY27, with revenue increasing 11.3% year on year to ₹83.16 crore and net profit rising 14.8% to ₹9.88 crore. But the most interesting part of the quarter was not just the financial performance.

A warehouse dispatch bottleneck, faster growth at company operated stores and an unusually successful festive marketing campaign revealed several important developments behind the numbers.

Revenue from operations increased from ₹74.71 crore in Q2 FY26 to ₹83.16 crore in Q2 FY27. Profit before tax rose 15.2% to ₹13.25 crore, while earnings per share improved to ₹4.27 from ₹3.72.

Sequentially, revenue increased 39.5% from ₹59.63 crore in Q1 FY27. This reflects the stronger festive season trading activity during the September quarter.

Management had indicated in August that it expected approximately 45% quarter-on-quarter revenue growth, implying quarterly revenue of around ₹86 crore. The actual figure came in slightly below that expectation.

The company explained that the shortfall was partly caused by a warehouse dispatch constraint. Wholesale orders accumulated during the final days of September, but the available dispatch capacity could not process all of them before the quarter closed.

Some product categories also experienced temporary shortages. Management said supplies were restored within a few days, but the affected orders were dispatched and invoiced in the December quarter rather than September.

This is an important distinction when assessing the quarterly performance. The company did not say that all the delayed orders represented lost demand; some sales were shifted into the following reporting period because dispatch and invoicing happened later.

Management is working with trade partners to encourage more evenly distributed ordering throughout the quarter. It is also considering warehouse expansion to address the capacity limitations, although no specific investment amount or completion schedule has been disclosed.

Another encouraging development came from the company’s own retail stores. Revenue from company owned and company operated stores increased 24.5% year on year, considerably faster than the overall company growth of 11.3%.

Footfall at these stores was also higher than in the previous year. During the festival fortnight, company operated store footfall increased 20.3% year on year, according to management’s business update.

The difference between overall revenue growth and company operated store growth suggests that the retail channel performed particularly well. However, the company has not disclosed the absolute revenue contribution from this store category.

Festival timing also affected the quarterly comparison. Durga Puja fell in the September quarter in the previous financial year but falls in the December quarter in FY27.

Despite that calendar shift, much of the Puja shopping took place during the weeks leading up to the festival and was recorded in the September quarter. Management said festival trading was encouraging.

There is another interesting detail in the company’s franchise model. Management says franchised store sales are generally booked around ten days before the retail counter sale, meaning franchise related festival revenue can appear earlier in the reported calendar than sales from company operated stores.

Sreeleathers also reported an unusually strong response to its Pujo Manei Sreeleathers campaign. The campaign ran across newspapers, outdoor advertising and social media during the 100 days leading up to Durga Puja.

According to management, Facebook and Instagram content generated 14.2 million organic views during the 90 days ending October 8, 2026. Facebook contributed 10 million views, while Instagram generated 4.2 million.

The company stated that none of this content was boosted through paid promotion. Its reels were filmed in its own stores with its own team, while customers also shared photographs of the catalogue and their purchases.

The campaign generated approximately 147,000 content interactions across the two platforms. These figures are management’s social media analysis, not audited financial measures, and views include repeat viewing rather than representing unique people.

On profitability, gross profit increased 4.8% to ₹18.40 crore from ₹17.56 crore. However, the gross margin declined to 22.1% from 23.5% in Q2 FY26, a reduction of 138 basis points.

Operating EBITDA increased 13.6% to ₹13.27 crore, while the operating EBITDA margin improved to 16.0% from 15.6%. This represented a 33 basis point improvement despite the decline in gross margin.

Lower dealer incentives helped support operating profitability. Dealer incentives declined to ₹1.13 crore from ₹1.68 crore, while employee expenses and other expenses also decreased slightly year on year.

For H1 FY27, revenue increased 14.4% to ₹142.79 crore from ₹124.81 crore. Profit after tax increased 46.1% to ₹16.86 crore, compared with ₹11.54 crore in the previous first half.

The company entered the festive quarter with 34 authorised stores across eight states. Inventory stood at ₹11.51 crore on September 30, compared with ₹8.05 crore at the end of March, reflecting stock maintained for the festival season.

Another balance sheet detail is that Sreeleathers reported no borrowings as of September 30, 2026. This gives the company a different financial position from retailers that rely heavily on debt to fund inventory and store expansion.

Management expects Q3 FY27 revenue from operations to reach ₹67 crore to ₹70 crore. This would represent growth of approximately 10% to 15% over the ₹60.90 crore reported in Q3 FY26, although it would be lower than Q2 revenue because of the different timing of festive shopping.

The December quarter includes Diwali, Christmas, post-Puja trading and wholesale orders deferred from September. The next results will show how much of the delayed wholesale business was captured and whether the company’s retail momentum continued through the festive period.