Stovec Inds. Q3 FY26 Results (BSE: 504959)
Signal: Margin pressure
The read
The Q3 inflection is negative: revenue grew 11.9% YoY, but gross margin compressed 897bps to 42.8%, EBITDA fell 11.2% to ₹26.63 million and PAT fell 11.3% to ₹10.62 million after Q2's sequential recovery; the next evidence needed is whether the margin setback is transient because the filing does not disclose its cause.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹45.77 Cr | +11.9% | -13.3% |
| EBIT | ₹1.33 Cr | -17.4% | |
| Net profit | ₹1.06 Cr | -11.3% | |
| EPS | ₹5.08 | -11.3% | |
| EBIT margin | 5.8% |
P&L walk
Revenue recovered 11.9% YoY to ₹457.66 million, led by Textile Machinery and Consumables, but gross margin fell to 42.8% from 51.7%, pulling EBITDA down 11.2% to ₹26.63 million and PAT down 11.3% to ₹10.62 million; lower other income also reduced support to earnings.
Segments
Textile Machinery and Consumables drove the group with ₹430.67 million of revenue and ₹10.00 million of segment result, while Graphics Consumables grew revenue 3.7% YoY to ₹26.99 million but its result fell 29.5% YoY to ₹9.69 million.
Key positives
- Revenue increased 11.9% YoY to ₹457.66 million, led by Textile Machinery and Consumables revenue of ₹430.67 million, up 12.5% YoY.
- Employee plus other expenses declined 9.3% YoY to ₹174.82 million while revenue rose 11.9% YoY, providing some cost containment.
- Finance costs remained nil, preserving a debt-free operating profile in the quarter.
Key concerns
- Gross margin compressed 897bps YoY to 42.8% despite revenue growth of 11.9%; the filing does not disclose whether the deterioration was mix-, pricing- or cost-led.
- EBITDA declined 11.2% YoY to ₹26.63 million and EBITDA margin fell 152bps to 5.8%, showing that revenue growth did not translate into operating-profit growth.
- PAT declined 11.3% YoY to ₹10.62 million and 56.7% QoQ, while other income fell 49.6% YoY to ₹5.75 million.
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