Bharat Seats Q1 FY27 Results (NSE: BHARATSE)
Signal: Steady quarter
The read
Revenue growth remained strong (+35% YoY) but gross margin contraction of 164bps YoY signals input cost pressure that was not fully passed through; EBITDA margin slipped slightly. PAT grew faster due to lower finance cost. The company approved ₹49.33 Cr capex for new Maruti Suzuki programmes, indicating confidence in demand pipeline. Key overhang: ongoing income tax search and penalty demands (₹271.48 lakhs) with auditor's emphasis of matter.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹577.83 Cr | 35.3% | -70.4% |
| EBIT | ₹19.91 Cr | 34.1% | |
| Net profit | ₹13.21 Cr | 43.9% | |
| EPS | ₹2.1 | 43.8% | |
| EBIT margin | 5.1% |
P&L walk
Revenue grew 35.3% YoY on strong demand from Maruti Suzuki, but gross margin contracted 164bps to 12.9% as raw material cost % of revenue rose to 87.1% from 85.4%, indicating input cost pressure not fully passed through. EBITDA margin slipped 20bps to 5.1% despite operating leverage on employee costs (up 16.4% vs revenue 35.3%). PAT grew faster at 43.9% aided by lower finance cost (-12.4% YoY) and a lower tax rate (25.4% vs 25.7%). EPS tracked PAT at +43.8%.
Key positives
- Revenue growth of 35.3% YoY driven by strong volume from Maruti Suzuki.
- PAT growth of 43.9% YoY outpacing revenue growth due to lower finance cost and stable tax rate.
- EPS growth of 43.8% YoY, tracking PAT with no dilution.
- Approved ₹49.33 Cr capex for new programmes at Kharkhoda and Navyani plants, signalling future growth.
Key concerns
- Gross margin contracted 164bps YoY to 12.9% as raw material cost % of revenue rose to 87.1%, indicating input cost pressure.
- EBITDA margin slipped 20bps YoY to 5.1% despite operating leverage on employee costs.
- Sequential decline in revenue and profit largely due to Q1 seasonality, but QoQ comparisons are less meaningful.
- Pending income tax search-related demands of ₹271.48 lakhs (penalties) with auditor's emphasis of matter.
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