Swastika Investm Q1 FY27 Results (BSE: 530585)
Signal: Margin expansion
The read
Standalone PAT grew 20% YoY to ₹410.17 lakhs on revenue of ₹2,889.55 lakhs (+12.2% YoY), driven by strong interest income and trading gains. However, core brokerage fees declined and finance costs more than doubled, compressing net margin. EPS growth lagged PAT growth by 12 percentage points, raising concern about dilution; the board's approval to issue ~9 million warrants (convertible into equity) will add further dilution. The company's business mix is shifting towards lending and trading, which carry higher credit/market risk.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹28.9 Cr | 12.2% | 6.2% |
| EBIT | ₹8.83 Cr | 38.3% | |
| Net profit | ₹4.1 Cr | 20.0% | |
| EPS | ₹2.04 | 7.9% | |
| EBIT margin | 31.5% |
P&L walk
Revenue growth was driven by a 43% surge in interest income, while core brokerage fees slipped 1.8% YoY. EBITDA margin expanded 668bps YoY (31.5% vs 24.8%) as employee costs grew slower than revenue (764.89 vs 813.66, -6% YoY) even as finance costs more than doubled. PAT grew 20% YoY but EPS lagged at 8% due to potential dilution from warrants/options.
Key positives
- Interest income surged 43% YoY to ₹1,000.61 lakhs, indicating strong lending/ margin funding activity.
- EBITDA margin expanded 668bps YoY to 31.5%, aided by employee cost decline and revenue growth.
- PAT grew 20% YoY, accelerating from previous quarter's 12% YoY growth (Q4FY26 vs Q4FY25).
Key concerns
- Fees and commission income (core brokerage) declined 1.8% YoY, indicating competitive pressure or lower volumes.
- Finance costs more than doubled YoY (₹326.90 lakhs vs ₹135.83 lakhs), reaching 11.3% of revenue vs 5.3% a year ago; interest coverage ratio at 2.7x is thin.
- EPS growth (7.9%) lags PAT growth (20%), signaling possible dilution from outstanding warrants/options or rounding effects.
- Preferential warrant issue of up to 9.05 million shares (₹57.59 Cr) will dilute equity further; reliance on equity funding suggests high leverage.
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