Ambika Cotton Q1 FY27 Results (NSE: AMBIKCO)
Signal: Margin expansion
The read
The key inflection is operating profitability: derived EBITDA grew 78.7% YoY versus revenue growth of 34.4%, a +44.4 percentage-point growth gap, while EBITDA margin expanded 379bps to 15.28% because employee costs grew -0.8% and other expenses +9.4% versus revenue +34.4%; however, gross margin compressed 351bps to 33.30% as material and purchase costs rose to 66.71% of revenue, so the margin recovery depends on operating-cost discipline rather than input-cost relief.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹257.92 Cr | +34.4% | +19.9% |
| EBIT | ₹34.17 Cr | +55.0% | |
| Net profit | ₹25.7 Cr | +61.4% | |
| EPS | ₹44.89 | +61.4% | |
| EBIT margin | 15.28% |
P&L walk
Standalone revenue increased to ₹25,792 lakh (+34.4% YoY, +19.9% QoQ); gross margin compressed to 33.30% from 36.81% as material and purchase costs rose to 66.71% of revenue, but lower employee and other-expense intensity lifted EBITDA margin to 15.28% and PAT to ₹2,570 lakh (+61.4% YoY).
Key positives
- Revenue reached ₹25,792 lakh, up 34.4% YoY and 19.9% QoQ, although the filing does not split volume and price effects.
- Derived EBITDA grew 78.7% YoY to ₹3,941 lakh versus revenue growth of 34.4%, a +44.4 percentage-point gap; employee costs fell 0.8% YoY and other expenses rose 9.4% versus revenue growth of 34.4%, driving a 379bps EBITDA-margin expansion to 15.28%.
- PAT rose 61.4% to ₹2,570 lakh and EPS rose 61.4% to ₹44.89, with weighted-average shares unchanged at 5,725,000.
- Finance costs declined 26.8% YoY to ₹295 lakh, providing an additional support to EBIT and PAT.
Key concerns
- Gross margin compressed 351bps YoY to 33.30% as raw-material, purchase and inventory costs rose to 66.71% of revenue from 63.19%; revenue grew 34.4% while this cost basket grew 41.8%, indicating cost absorption and no disclosed pricing or input-cost offset.
- EBITDA margin declined 124bps QoQ from approximately 16.52% to 15.28%, so the YoY recovery has not yet established sequential momentum.
- The filing does not disclose spinning volumes, yarn realisations, capacity utilisation or order data, limiting attribution of the 34.4% revenue increase to volume versus price/mix.
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