3M India Q2 FY27 Results (NSE: 3MINDIA)
Signal: Margin pressure
The read
The trajectory has shifted from Q1FY27's 19.0% revenue growth and 17.6% EBITDA margin to Q2FY27's 14.7% growth and 16.1% margin: Transportation & Electronics is carrying volume momentum, but a 638bps gross-margin compression and a 12.7% EBITDA decline show that the current issue is input-cost absorption rather than fixed-cost leverage.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,452.49 Cr | +14.7% | +2.1% |
| EBIT | ₹205.42 Cr | -14.7% | |
| Net profit | ₹158.48 Cr | -17.2% | |
| EPS | ₹140.68 | -17.2% | |
| EBIT margin | 16.1% |
P&L walk
Standalone-only results: revenue rose 14.7% YoY and 2.1% QoQ to ₹1,452.49 crore, but gross margin fell 638bps to 37.9%, EBITDA declined 12.7% to ₹234 crore, and PAT fell 17.2% to ₹158.48 crore.
Segments
Transportation & Electronics was the main growth engine, with revenue up 23.4% YoY to ₹536.61 crore, while Consumer grew 19.5% to ₹170.84 crore; Safety & Industrial dragged profitability as segment result fell 54.2% YoY to ₹31.24 crore despite 11.8% revenue growth.
Key positives
- Revenue from operations rose 14.7% YoY to ₹1,452.49 crore, with all disclosed operating segments growing YoY.
- Transportation & Electronics revenue increased 23.4% YoY to ₹536.61 crore, the fastest material segment growth and above consolidated revenue growth.
- Consumer revenue rose 19.5% YoY to ₹170.84 crore, while its segment result increased 22.4% YoY to ₹29.44 crore.
- H1FY27 operating cash flow increased to ₹418.25 crore from ₹299.87 crore despite reported PAT of ₹391.55 crore for the half year.
- PPE increased to ₹335.55 crore from ₹320.24 crore and CWIP to ₹15.52 crore from ₹13.81 crore, with depreciation rising 17.1% YoY to ₹17.61 crore.
Key concerns
- Gross margin fell 638bps YoY to 37.9%, with combined material, purchase and inventory costs rising to 62.1% of revenue from 55.7%; the filing does not disclose the precise driver.
- EBITDA fell 12.7% YoY to ₹234 crore and EBITDA margin declined to 16.1% from 21.2%, despite revenue growth of 14.7%.
- Safety & Industrial segment result fell 54.2% YoY to ₹31.24 crore while revenue grew 11.8%, indicating a sharp segment-level profitability deterioration.
- PBT and PAT were down 15.3% and 17.2% YoY respectively, showing that the margin pressure flowed through to earnings rather than being confined to gross profit.
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