D2C Fashion Growth: The Indian Garage Co’s Journey
In the expanding landscape of India’s D2C fashion market, brands like Snitch, Rare Rabbit, Bewakoof, and The Souled Store are seeing significant growth. The Indian Garage Co (TIGC) experienced a 15% increase in operating revenue for FY26, a stark contrast to the double growth rate of the previous year. However, losses also surged by 27% to Rs 29 crore during the same period.
The Indian Garage Co’s Financial Performance
TIGC’s revenue from operations rose to Rs 234.6 crore in FY26, up from Rs 204.2 crore in FY25, as reported in its financial statements submitted to the Registrar of Companies (RoC). This D2C fashion firm focuses on designing, manufacturing, and selling men’s apparel through its in-house brands, targeting the mass-premium segment. The sales of products form the only revenue source for the company.
Comprehensive Income Insights
The total income of the company, which includes additional earnings of Rs 2.95 crore, reached Rs 237.5 crore in FY26, compared to Rs 206.9 crore in the previous fiscal year.
Expenditure Overview for D2C Brand
For this D2C brand, costs related to materials constituted the largest portion of expenditures, escalating by 13% to Rs 117.5 crore in FY26 from Rs 104 crore in FY25. Advertising and promotional spending skyrocketed, increasing more than twofold to Rs 29.3 crore in FY26 from Rs 14 crore in FY25, reflecting heightened investments in the face of growing competition in the fashion industry.
Additional Costs and Total Expenditure
Job work charges, which encompass expenses for third-party vendors engaging in outsourced manufacturing and production tasks, amounted to Rs 39.5 crore. Furthermore, expenses related to employee benefits rose by 24% to Rs 21 crore during the fiscal year. Various costs, including depreciation and amortisation, finance charges, legal and professional fees, travel expenses, and other overheads, led to an overall increase in The Indian Garage Co’s total expenditures, which climbed by 16% to Rs 276.1 crore in FY26 from Rs 237.5 crore in FY25.
Impact of Increased Expenditures
As expenses continued to exceed revenues, the losses for the Aditya Birla Digital-owned company expanded over the fiscal year. Losses rose by 27% year-on-year, reaching Rs 28.7 crore, an increase from Rs 22.6 crore in FY25.
Operational Efficiency and Financial Ratios
On a unit basis, spending stood at Rs 1.18 for each rupee of operating revenue in FY26, compared to Rs 1.16 in the previous year. The EBITDA margin showed a slight improvement, reaching -5.12%, up from -6% in FY25, while the return on capital employed (ROCE) was recorded at -12.61%.
Investment and Strategic Positioning
The Aditya Birla Group’s TMRW made a significant investment of around Rs 155 crore in TIGC in October 2023, acquiring a 51% controlling interest in the company. TMRW also has a majority stake in the D2C apparel brand Bewakoof, gained in December 2022.
Future Challenges for the D2C Fashion Brand
The figures from The Indian Garage Co highlight a challenging period for established D2C fashion brands, indicating that mere growth may no longer suffice to attract ongoing investment. As customer acquisition costs rise and competition escalates, brands are required to maintain stronger retention, inventory control, and operational efficiency to foster sustainable success. A critical question for TIGC is whether its partnership with TMRW and the broader Aditya Birla network can enhance distribution and scalability, while simultaneously improving the financial health of the business.