Nikhil Adhesives Q1 FY27 Results (BSE: 526159)
Signal: Steady quarter
The read
The key inflection is earnings recovery rather than margin expansion: revenue grew 52.7% YoY and EBIT 72.2%, but gross margin contracted 290bps to 23.4% as material costs reached 77.7% of revenue versus 71.1% a year ago; PAT growth to 105.0% was helped by lower finance costs and a clean other-income contribution.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹188.59 Cr | 52.7% | +13.6% |
| EBIT | ₹11.16 Cr | 72.2% | |
| Net profit | ₹7.32 Cr | 105.0% | |
| EPS | ₹1.59 | 103.8% | |
| EBIT margin | 6.9% |
P&L walk
Revenue increased to ₹18,858.79 lakh (+52.7% YoY, +13.6% QoQ), while gross margin contracted to 23.4% from 26.3% as material costs rose faster than sales; EBITDA reached ₹1,304 lakh (+53.6% YoY) with a 6.9% margin, and PAT growth accelerated to ₹732.45 lakh (+105.0% YoY) on operating profit growth and lower finance costs.
Key positives
- Revenue reached ₹18,858.79 lakh, up 52.7% YoY and 13.6% QoQ, indicating sustained top-line momentum.
- EBITDA rose 53.6% YoY to ₹1,304 lakh despite gross-margin compression, as employee benefits and other expenses grew 37.0%, below revenue growth of 52.7%.
- PAT increased 105.0% YoY to ₹732.45 lakh, supported by EBIT growth of 72.2% and finance-cost reduction of 12.6%.
- EPS growth of 103.8% broadly tracked PAT growth of 105.0%, with no material dilution indicated.
Key concerns
- Gross margin compressed 290bps YoY to 23.4%, while cost of materials consumed rose 64.5% YoY versus revenue growth of 52.7%, indicating the company absorbed part of the input-cost increase.
- EBITDA margin was only 6.9%, showing that the strong revenue growth has not yet translated into meaningful operating-margin expansion.
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