SK Minerals & Additives Q1 FY27 Results (BSE: 544584)
Signal: Margin expansion
The read
The quarter shows strong scale growth—revenue ₹6444.93 lakh, +88.7% YoY—but the dominant quality issue is a 288bps gross-margin compression as direct material and inventory costs grew 95.7%; EBITDA margin still expanded 135bps to 10.67% because employee costs grew only 12.0%, while finance costs surged 139.3% and EPS growth lagged PAT because of dilution.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹64.45 Cr | +88.7% | -49.2% |
| EBIT | ₹6.56 Cr | +119.8% | |
| Net profit | ₹3.7 Cr | +124.5% | |
| EPS | ₹3.03 | +65.6% | |
| EBIT margin | 10.67% |
P&L walk
Standalone revenue increased 88.7% YoY to ₹6444.93 lakh, while direct material and inventory costs grew faster at 95.7%, compressing gross margin by 288bps; EBITDA margin nevertheless expanded 135bps to 10.67% as employee costs grew only 12.0%.
Key positives
- Revenue from operations reached ₹6444.93 lakh, up 88.7% YoY, continuing the company’s high-growth trajectory despite a 49.2% QoQ decline from the March quarter.
- EBITDA grew 115.9% YoY to an implied ₹687.44 lakh versus revenue growth of 88.7%, a 27.2pp growth gap, while EBITDA margin expanded 135bps to 10.67%.
- Employee benefit expenses increased only 12.0% YoY to ₹159.74 lakh, far below revenue growth and supporting margin expansion.
Key concerns
- Gross margin compressed 288bps YoY to 20.38% as material, stock-in-trade and inventory costs rose 95.7% to ₹5131.27 lakh, or 79.63% of revenue versus 76.73% last year; the filing does not disclose the cause.
- Finance costs rose 139.3% YoY to ₹174.93 lakh, faster than revenue growth, indicating rising funding pressure despite strong operating growth.
- EPS increased only 65.6% to ₹3.03 versus PAT growth of 124.5%, reflecting the increase in paid-up equity capital from ₹900.00 lakh to ₹1224.00 lakh.
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