Borana Weaves Q2 FY27 Results (NSE: BORANA)
Signal: Margin pressure
The read
The trajectory inflected negatively on profitability: revenue accelerated to 44.7% YoY growth from 24.5% in Q1FY27, but gross margin compressed 403bps YoY to 36.27%, derived EBITDA margin fell 756bps to 19.16%, and PAT declined 3.1% to ₹1,615.96 lakh; the key issue is whether the higher ₹8,806.44 lakh material burden is transient or structural.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹138.2 Cr | 44.7% | 37.1% |
| EBIT | ₹20.38 Cr | -4.4% | |
| Net profit | ₹16.16 Cr | -3.1% | |
| EPS | ₹6.06 | -3.2% | |
| EBIT margin | 19.16% |
P&L walk
Standalone revenue increased 44.7% YoY to ₹13,820.13 lakh, but gross margin compressed 403bps as cost of materials and inventory adjustment rose to ₹8,806.44 lakh; derived EBITDA fell to a 19.16% margin, and PAT declined 3.1% to ₹1,615.96 lakh despite lower finance cost.
Key positives
- Revenue increased 44.7% YoY to ₹13,820.13 lakh, accelerating from the 24.5% YoY growth reported for Q1FY27.
- Finance cost declined 22.9% YoY to ₹67.81 lakh, while H1 operating cash flow turned positive at ₹1,056.24 lakh versus negative ₹5,637.25 lakh in H1FY26.
- CWIP increased to ₹9,587.77 lakh from ₹8,093.62 lakh at March 2026, supporting continued capacity investment.
Key concerns
- Gross margin compressed 403bps YoY to 36.27% as raw material cost including inventory adjustment rose to 63.73% of revenue from 59.70%; the filing does not disclose the cause.
- Revenue grew 44.7% YoY, but derived EBITDA grew only 3.8% and EBITDA margin fell 756bps to 19.16%, showing no operating leverage in the quarter.
- Employee benefits expense rose 62.6% YoY to ₹1,061.76 lakh, faster than revenue growth, while PAT fell 3.1% YoY to ₹1,615.96 lakh.
- Trade receivables increased to ₹3,503.26 lakh and inventories to ₹5,328.27 lakh, while cash and equivalents were negative ₹31.30 lakh at September 2026.
Research and educational content only. Not investment advice.