The stationery maker’s net profit fell to ₹44.4 crore in the April-June quarter from ₹57.2 crore a year earlier.
Revenue from operations, however, increased 19.3% year-on-year to ₹670.5 crore from ₹562.2 crore.
The results highlight a common challenge for consumer companies: strong demand does not always translate into higher profits when input costs rise sharply.
Commodity inflation hits margins
EBITDA declined 16.3% to ₹82.6 crore, while EBITDA margin contracted sharply to 12.3% from 17.6% a year ago.
The company said profitability was impacted by:
- Higher raw material costs
- Increased employee expenses
- Higher depreciation following capacity expansion
For stationery manufacturers, raw materials such as paper, plastics, graphite and packaging materials form a significant part of costs. A sudden increase in commodity prices can quickly squeeze margins if price hikes cannot fully offset the increase.
Domestic demand remains strong
Managing Director Santosh Raveshia said the company maintained its growth momentum despite a challenging external environment, including volatility in raw material prices.
Revenue growth was driven by:
- Strong back-to-school demand
- New product launches
- Calibrated price increases
- Higher average selling prices
The company said growth was broad-based across categories, including:
- Scholastic stationery
- Scholastic art materials
- Kits and combos
- Office supplies
- Paper stationery
The strong revenue growth indicates that demand for DOMS products remained healthy, particularly during the important back-to-school season, when stationery purchases typically see a seasonal boost.
Company chooses growth over short-term margins
Raveshia said DOMS prioritised “volume-led growth and market share expansion” over near-term margins amid sharp commodity inflation.
The company also incurred additional costs due to:
- A fresh tranche of ESOP grants
- Higher hiring for its upcoming manufacturing facility
- Channel partner events
- Expenses related to its greenfield project
While these expenses hurt near-term profitability, investments in capacity and distribution could help the company capture larger market opportunities over the long term.
Reynolds acquisition expands portfolio
DOMS has completed the acquisition of identified assets of the Reynolds-branded pens, markers, highlighters and school supplies business from Reynolds Pens India and affiliated entities.
The transaction was valued at around ₹35 crore ($3.7 million), excluding inventories, and became effective from July 1, 2026.
The accounting impact will be reflected in the September quarter.
The Reynolds acquisition gives DOMS access to an established brand in writing instruments and could help it strengthen its presence beyond its existing stationery portfolio, particularly in the office segment.
Raveshia said the company aims to build Reynolds as a strong parallel brand and introduce multiple products under the name.
Capacity expansion on track
DOMS said its 50-plus acre greenfield manufacturing project remains on track despite a slight delay.
The first phase is expected to begin commercial operations by the end of Q2 FY27, adding more than 300,000 square feet of manufacturing space.
The additional capacity could help DOMS improve supply chain efficiency, reduce dependence on third-party manufacturing and support future product launches.
Outlook remains positive but costs remain a watchpoint
Raveshia said domestic demand remains supportive, though raw material price volatility continues to be a key monitorable.
He added that expanded capacity, a stronger brand portfolio and continued execution would support growth in the coming quarters.
Shares of DOMS Industries ended 1.4% higher at ₹2,292 on the NSE on Monday.
The stock’s positive reaction suggests investors are looking beyond the near-term margin pressure and focusing on DOMS’ long-term growth strategy, including capacity expansion and the Reynolds brand opportunity.
