Assoc.Alcohols Q1 FY27 Results (NSE: ASALCBR)
Signal: Margin pressure
The read
Q1FY27 earnings deteriorated sharply: revenue growth of 5.96% YoY was insufficient to absorb raw material cost inflation (gross margin -192bps) and a 21.6% jump in employee costs, while the ethanol division moved from profit to loss. PAT fell 24.6% YoY, and EPS fell 32.1% due to equity dilution. The company's core potable alcohol business remains stable but is being overshadowed by ethanol losses and rising costs.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹286.3 Cr | 5.96% | 18.51% |
| EBIT | ₹25.9 Cr | -22.3% | |
| Net profit | ₹17.83 Cr | -24.6% | |
| EPS | ₹8.88 | -32.1% | |
| EBIT margin | 9.05% |
P&L walk
Revenue grew 5.96% YoY but gross margin contracted 192bps on higher raw material costs; employee costs rose 21.6%, while other expenses were controlled. EBITDA declined 15.3% YoY, leading to PAT decline of 24.6%.
Segments
Ethanol division swung from a profit of ₹107.21 lakh in Q1FY26 to a loss of ₹836.71 lakh in Q1FY27, dragging consolidated results; Potable Alcohols division posted steady revenue growth of 6.85% YoY but segment profit margin slightly compressed from 15.85% to 15.57%.
Key positives
- Potable Alcohols division revenue grew 6.85% YoY and maintained a segment profit margin near 15.6%.
- Revenue from operations grew 5.96% YoY despite ethanol headwinds, indicating underlying demand for potable alcohol.
Key concerns
- Ethanol division swung from a profit of ₹107.21 lakh to a loss of ₹836.71 lakh YoY, reflecting severe margin pressure in the ethanol business.
- Overall PAT declined 24.6% YoY and EPS declined 32.1% due to equity dilution (paid-up capital increased 11.1% YoY).
- Gross margin contracted ~192 bps YoY to 32.44% on higher raw material costs (62.2% of revenue vs 59.6% last year).
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