Digilogic Systems H1FY26 Results (BSE: 544684)
Signal: Margin pressure
The read
The trajectory is a sharp revenue and PAT acceleration—consolidated revenue ₹3318.19 lakh, +82.5% YoY, and PAT ₹476.19 lakh, +150.5%—but the immediate thesis risk is input absorption: gross margin contracted 1614bps as raw materials reached 57.4% of revenue, while negative operating cash flow of ₹421.68 lakh contrasts with reported profit.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹33.18 Cr | 82.5% | N/A |
| Net profit | ₹4.76 Cr | 150.5% | |
| EPS | ₹1.65 | 94.1% | |
| EBIT margin | 19.0% |
P&L walk
Consolidated revenue increased 82.5% YoY to ₹3318.19 lakh, but gross margin fell to 42.6% from 58.8% as raw-material cost rose to 57.4% of revenue from 34.8%; EBITDA margin fell to 19.0% despite PAT growth of 150.5% to ₹476.19 lakh.
Key positives
- Consolidated revenue rose 82.5% YoY to ₹3318.19 lakh, showing materially faster growth than the company's 3-year sales CAGR of 7.45%.
- Consolidated PAT rose 150.5% YoY to ₹476.19 lakh while finance costs fell 20.9% YoY to ₹54.02 lakh.
- Employee and other expenses rose only 11.0% YoY to ₹783.36 lakh versus 82.5% revenue growth, indicating substantial cost absorption even though gross-margin pressure prevented EBITDA-margin expansion.
- The company retained ₹4876.07 lakh of allocated IPO facility capex for future utilisation, providing funding headroom for capacity expansion.
Key concerns
- Gross margin fell 1614bps YoY to 42.6% as raw-material cost rose to 57.4% of revenue from 34.8%; the filing does not disclose pricing, mix or input-cost mitigation.
- Negative operating cash flow of ₹421.68 lakh contrasts with consolidated PAT of ₹476.19 lakh, making working-capital conversion a key monitor.
- EPS rose 94.1% to ₹1.65, materially slower than PAT growth of 150.5%, weakening per-share earnings conversion.
- The filing provides no volume, order-book or capacity-utilisation data, limiting visibility into whether the 82.5% revenue increase is repeatable.
Research and educational content only. Not investment advice.