Balmer Lawrie Q2 FY27 Results (NSE: BALMLAWRIE)
Signal: Margin expansion
The read
The trajectory improved on revenue and operating margin: consolidated revenue rose 26.0% YoY and derived EBITDA margin expanded 180bps to 14.6%, reversing the prior-quarter 11% OPM weakness; however, the gross-margin compression, 59.8% finance-cost increase and negative H1 operating cash flow keep earnings quality and cash conversion as the key watchpoints.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹800.72 Cr | +26.0% | +6.9% |
| EBIT | ₹97.17 Cr | +21.3% | |
| EBIT margin | 14.6% |
P&L walk
Consolidated revenue increased to ₹80,072.37 lakh, +26.0% YoY and +6.9% QoQ, but raw-material and services intensity rose to 66.4% from 65.1%; derived EBITDA margin nevertheless improved to 14.6% from 12.8%, while finance costs rose 59.8% YoY to ₹1,134.55 lakh.
Segments
The supplied filing provides segment results only on a standalone basis: Logistics Services was the strongest disclosed contributor at ₹4,407.92 lakh of segment result, +143.4% YoY, while Others remained loss-making at ₹2,235.43 lakh versus a ₹2,259.84 lakh loss a year earlier; Greases & Lubricants also improved to ₹2,054.26 lakh from ₹1,662.78 lakh.
Key positives
- Consolidated revenue increased 26.0% YoY to ₹80,072.37 lakh, accelerating from the prior Q1FY27 growth rate of 10.0%.
- Derived consolidated EBITDA margin expanded 180bps YoY to 14.6%; employee benefits plus other expenses grew 6.2% YoY against 26.0% revenue growth.
- Standalone PAT rose 39.6% YoY to ₹6,765.97 lakh and basic EPS rose 39.9% to ₹3.96, with EPS tracking profit.
- Logistics Services segment result rose 143.4% YoY to ₹4,407.92 lakh, while Greases & Lubricants result rose 23.5% to ₹2,054.26 lakh.
Key concerns
- Gross margin compressed 124bps YoY to 33.6% on the consolidated basis as materials, services and related costs rose to 66.4% of revenue from 65.1%.
- Finance costs rose 59.8% YoY to ₹1,134.55 lakh on a consolidated basis and 90.0% to ₹949.30 lakh standalone, diluting operating-profit conversion.
- H1 operating cash flow was negative at ₹(10,195.04) lakh versus ₹(7,273.38) lakh in H1FY26, despite H1 standalone PAT of ₹12,532.03 lakh.
- The Others segment remained loss-making at ₹2,235.43 lakh in Q2, limiting the benefit from stronger Logistics Services performance.
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