Magna Electrocas Q1 FY27 Results (BSE: 517449)
Signal: Margin pressure
The read
The operating trajectory deteriorated in Q1FY27: revenue grew 4.7% YoY to ₹5,081.48 lakh, but materials consumed increased to 34.5% of revenue from 28.9%, gross margin fell 273bps to 69.0%, EBITDA margin fell 550bps to 15.6%, and PAT declined 44.0% to ₹372.55 lakh. The proposed in-house machining division, involving ₹17 Crores of investment and seven CNC machines targeted for commissioning by January 2027, is the main potential structural response, but benefits remain prospective.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹50.81 Cr | 4.7% | +6.7% |
| EBIT | ₹5.32 Cr | -40.6% | |
| Net profit | ₹3.73 Cr | -44.0% | |
| EPS | ₹8.8 | -44.1% | |
| EBIT margin | 15.6% |
P&L walk
Revenue rose 4.7% YoY to ₹5,081.48 lakh, but gross margin contracted 273bps to 69.0% and EBITDA margin fell 550bps to 15.6%, driving EBIT down 40.6% and PAT down 44.0%; the decline was driven by higher material intensity and operating-cost pressure rather than other income.
Key positives
- Revenue increased 4.7% YoY to ₹5,081.48 lakh and 6.7% QoQ, maintaining topline growth despite weaker profitability.
- The company approved a seven-CNC-machine in-house machining division with approximately ₹17 Crores of internally funded investment, targeted for commissioning by January 2027.
- In-house machining is intended to reduce third-party dependence, lead times and supply-chain risk while improving control over precision components.
Key concerns
- Gross margin compressed 273bps YoY to 69.0% as cost of materials consumed rose 564bps to 34.5% of revenue; the filing does not disclose the cause, indicating an unproven pricing or mix response.
- EBITDA declined 22.5% YoY and EBITDA margin fell 550bps to 15.6%, while manufacturing, employee and other expenses rose 10.4% against 4.7% revenue growth.
- PAT fell 44.0% YoY to ₹372.55 lakh despite revenue growth, extending the company’s recent weak profit trajectory.
- Depreciation rose 102.8% YoY to ₹261.27 lakh and finance costs rose 912.8% to ₹29.26 lakh, increasing pressure below gross profit.
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