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Revenue growth driven by better sugar segment performance

KPR Mill’s (KPR) revenue grew 9.6% YoY to INR19.4b in 1QFY27. The textile portfolio saw muted growth of 1%, while the sugar segment grew 21%. Gross margin improved 480bp YoY to 40.7%, while EBITDA margin settled at 19.4% (+180bp YoY). We expect KPR’s revenue growth to continue at ~13%, supported by capacity ramp-up, favorable demand in the garment segment, and strategic expansion in higher-margin branded apparel. Profitability is likely to strengthen gradually, with EBITDA margins expanding to 21.5% and APAT margins expanding to 14.8% by FY28E, driven by operating leverage and a better product mix. The board has approved a comprehensive capacity expansion (45m in Odisha and 2.5m in Coimbatore) and modernization plan across the textile value chain with total capex of INR12.25b and an expected turnover of INR20b.

Sugar drives revenue; modernization to help garmenting growth

KPR’s revenue grew 9.6% YoY to INR19.4b in 1QFY27. The textile portfolio (77% of sales) saw muted growth of 1%, while sugar segment, comprising 22% of the portfolio, delivered 21% growth. Textile segment posted EBIT margin of 18.5% (+130bp YoY), while sugar segment reported EBIT margin of 9.5% (+920bp YoY). We expect revenue to clock 13% CAGR over FY26- 28, supported by capacity ramp-up, favorable demand in the garment segment, and strategic expansion in higher-margin branded apparel. The board has approved a greenfield project for RMG manufacturing in Odisha with a capacity of 45m pieces per annum, which will be operational in 1QFY28. The board also approved some other capex plans, with total capex plans of INR12.25b and an expected turnover of INR20b.

EBITDA margin expansion driven by better cotton-yarn spread

In 1Q, gross margin expanded 480bp to 40.7%. EBITDA grew 20.8% to INR3.7b, with EBITDA margin at 19.4% (+180bp YoY), despite an increase in employee expenses (+19.2% YoY) and other expenses (+24.4% YoY). APAT grew 21.7% to INR2.6b. Textile segment delivered the highest EBIT margins at ~18.5%, while the sugar segment’s EBIT margins stood at ~9.5%. We expect EBITDA margins to gradually improve to 21.5%, led by a better spread in FY27

Valuation and view: Reiterate Neutral

We believe the company is well-positioned to benefit from its leadership in the Indian textile and apparel industry, supported by the largest garmenting capacity among listed peers. We model a revenue, EBITDA, and PAT CAGR of 13%, 20%, and 20%, respectively, over FY26-28, fueled by growth in the garment portfolio. We believe the current valuation already factors in low- to mid-teen growth, leaving limited upside at the CMP. Hence, we maintain our Neutral rating with a TP of INR1,200 (valuing the stock at 22x FY28E EV/EBITDA). Key risks: dependence on export markets, demand cyclicality in the apparel industry, and intense global competition (refer to our IC note dated Jun’26).

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