Balkrishna Inds Q2 FY27 Results (NSE: BALKRISIND)
Signal: Margin pressure
The read
The key inflection is not revenue but profitability: consolidated revenue accelerated 45.0% YoY to ₹3471.74 crore, yet gross margin contracted approximately 825bps and operating margin fell 140bps to 11.91% as raw-material costs reached 56.70% of sales; higher capex and working-capital absorption also pushed H1 operating cash flow down to ₹26.82 crore from ₹1262.85 crore.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,471.74 Cr | +45.0% | +0.5% |
| Net profit | ₹292.62 Cr | +7.1% | |
| EPS | ₹15.13 | +7.1% | |
| EBIT margin | 11.91% |
P&L walk
Consolidated revenue increased to ₹3471.74 crore, +45.0% YoY and +0.5% QoQ, but gross margin compressed to approximately 43.6% from 51.9% as material costs rose 77.4% YoY; EBITDA margin fell to 11.91%, while PAT rose only 7.1% to ₹292.62 crore.
Key positives
- Revenue was ₹3471.74 crore, up 45.0% YoY and 0.5% QoQ, showing continued top-line momentum despite margin pressure.
- Other expenses rose 20.1% YoY to ₹704.89 crore, materially slower than revenue growth of 45.0%.
- Consolidated PPE plus CWIP increased 17.0% to ₹11469.39 crore, while depreciation rose 12.0% YoY to ₹426.45 crore, a clean depreciation-to-capex signal.
- PAT increased 7.1% YoY to ₹292.62 crore and EPS tracked it at ₹15.13, with no dilution signal.
Key concerns
- Gross margin compressed approximately 825bps YoY to 43.6% as material costs rose to 56.70% of revenue from 46.32%; the filing does not disclose a mitigation driver.
- Operating margin fell 140bps YoY to 11.91% despite 45.0% revenue growth, limiting conversion of growth into profit.
- H1 consolidated operating cash flow fell to ₹26.82 crore from ₹1262.85 crore as ₹754.55 crore went into inventory and ₹571.32 crore into receivables.
- Consolidated borrowings increased to ₹6046.60 crore from ₹4105.56 crore at 31 March 2026, taking net debt to ₹5943.64 crore.
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