Trident's profit jumps 93% while revenue declines

Trident Limited (TRIDENT) reported a 93.4% year on year increase in consolidated net profit to ₹175.5 crore in Q2 FY27. But revenue from operations declined 3.8% to ₹1,719.5 crore. How does a company increase profit so sharply while generating lower revenue? The answer is operating profitability. EBITDA increased 46.5% to ₹313.7 crore, while EBITDA margin expanded from 12% to approximately 18.3%. However, the improvement was not uniform across business segments. The yarn business performed strongly. Its segment result increased to ₹191.2 crore from ₹47.2 crore a year ago. The towel business struggled. Revenue declined to ₹570.8 crore from ₹723.5 crore, while its segment result fell to ₹32.6 crore from ₹78.2 crore. This difference matters. The overall margin improvement is impressive, but weakness in the home-textile business remains a concern. Now comes the bigger development. Trident's board has given in principle approval for a ₹4,650 crore capacity expansion and modernisation programme. The investment covers: ₹2,682 crore towards yarn projects. ₹1,018 crore towards sheeting. ₹296 crore towards paper. ₹654 crore towards hybrid renewable energy. The projects are scheduled for completion in phases between 2027 and 2029. My view: Trident is improving profitability, but revenue growth is still missing. The proposed expansion is a significant investment, and investors need to understand how it will be funded and what returns it can generate. I would watch home textile demand, EBITDA margins, debt levels and cash flow before becoming more constructive. My stance: Better margins are encouraging, but a ₹4,650 crore expansion needs to generate adequate returns. A larger capacity base alone does not create shareholder value.