Starlineps Enter Q1 FY27 Results (BSE: 540492)
Signal: Margin pressure
The read
The key trajectory is revenue growth without earnings conversion: consolidated revenue rose 60.5% YoY to ₹2017.73 lakh, but direct costs grew 73.8%, gross margin contracted 731bps to 4.5%, EBITDA margin fell to 3% and PAT fell 59.1% to ₹35.89 lakh; this reverses Q4FY26's margin expansion and shows the recent margin arc remains fragile.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹20.18 Cr | 60.5% | -28.0% |
| EBIT | ₹0.6 Cr | -50.8% | |
| Net profit | ₹0.36 Cr | -59.1% | |
| EPS | ₹0.01 | -66.7% | |
| EBIT margin | 3% |
P&L walk
Consolidated revenue increased 60.5% YoY to ₹2017.73 lakh, but direct trading/material costs rose 73.8% to ₹1927.49 lakh, compressing gross margin by 731bps; EBITDA declined 50.4% to ₹0.61 crore and PAT declined 59.1% to ₹35.89 lakh.
Key positives
- Consolidated revenue rose 60.5% YoY to ₹2017.73 lakh despite a 28.0% sequential decline, preserving topline momentum versus Q1FY26.
- Employee and other operating expenses grew 16.5% YoY on a consolidated basis, far below the 60.5% revenue increase, providing some fixed-cost containment.
- Other income was zero and PAT of ₹35.89 lakh was operationally earned, with no material other-income contribution.
Key concerns
- Gross margin fell 731bps YoY to 4.5% as direct trading/material costs increased to 95.5% of revenue from 88.2%; the filing does not disclose a pass-through or mix explanation.
- EBITDA declined 50.4% YoY to ₹0.61 crore and EBITDA margin fell to 3%, showing that revenue growth is not translating into operating profit.
- Finance costs increased 129.0% YoY to ₹10.99 lakh, further reducing conversion from operating profit to PAT.
- EPS declined 66.7% YoY to ₹0.01 versus a 59.1% PAT decline, reflecting dilution from the enlarged equity base and newly listed preferential shares.
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