A lesser-known mid-cap company in investor Ashish Kacholia’s portfolio made headlines today after announcing strong quarterly results — its net profit jumped 67% year-on-year, prompting its shares to rise nearly 5% in intraday trading.
For investors tracking hidden gems and Kacholia’s picks, this result warrants a closer look.
What Happened (Result Highlights)
The company in question is Thomas Scott (India) Limited, a Mumbai-based firm engaged in manufacturing and trading men’s formal & casual apparel and fabrics.
Here are the key figures from Q2 FY26:
-
Revenue rose from ₹40.7 crore in Q2 FY25 to ₹56.9 crore in Q2 FY26 — a growth of 38% YoY.
-
On a quarter-on-quarter basis, revenue increased 6% from Q1 FY26’s ~₹53.9 crore.
-
Net profit climbed from ₹2.83 crore to ₹4.72 crore in the same period — representing the 67% YoY jump.
-
On a QoQ basis profit rose 36% from ~₹3.47 crore in Q1 FY26 to ₹4.72 crore in Q2.
-
Earnings per share (EPS) stood at ₹3.21 for Q2, up from ~₹2.50 in the previous quarter.
-
The company’s return on capital employed (ROCE) is ~20.4% and return on equity (ROE) ~16.4%. Debt to equity is modest at ~0.21.
-
The market cap of the company was around ₹623.86 crore at the time of the announcement.
Why This Result is Significant
-
Strong growth in a competitive segment: The apparel/textile space is often challenged by raw-material inflation, consumer demand swings and inventory risk. A 67% profit growth amidst such dynamics signals strong execution.
-
Low leverage: With a debt-to-equity ratio of just 0.21, the company appears financially stable and less vulnerable to interest rate shocks or working capital stress.
-
Solid efficiency metrics: ROCE of 20.4% and ROE of 16.4% show the company is generating decent returns from its capital and equity base — important for long-term compounding.
-
Backing of Ashish Kacholia: Kacholia’s stake (2.10% as of Sept 2025) draws attention and often suggests board oversight and disciplined investing.
What to Watch Going Ahead
-
Sustainability of margins: Apparel businesses often face margin pressure from raw-material cost, fashion risks and competition. Will the margin expansion hold?
-
Expansion plans & scale: How the company plans to scale its operations — more brands, EBOs, online presence — will determine growth beyond this quarter.
-
Inventory & working capital management: Apparel/textile firms are sensitive to inventory turns and ready-goods risk. Efficiency here will matter.
-
Valuation & room for upside: With profit results improving, is the stock fairly priced? The PEG (price/earnings to growth) ratio was cited as 0.23 in the article, indicating potential undervaluation.
-
Macro / consumer demand: Consumer sentiment and spending trends in formal & casual menswear will impact topline trajectory.
Conclusion
This strong quarterly result from Thomas Scott (India) is a noteworthy moment for investors who favour growth stories in smaller-cap stocks with strong backing and operational discipline. A 67% profit jump, low debt, and rising efficiency paint a favourable picture — but investors should keep an eye on execution, margin risks, and scalability.
In the world of stock-picking, especially when following significant investors like Ashish Kacholia, such signals can serve as a “checklist” rather than a guarantee.
Disclaimer: This blog is for educational purposes only and not investment advice. Always consult your financial advisor before making investment decisions.