Century Enka Q1 FY27 Results (NSE: CENTENKA)
Signal: Margin expansion
The read
Q1FY27 marks the 5th straight quarter of OPM expansion, reaching 14.6% (vs 3.9% a year ago), driven by operating leverage as employee cost (+12%) and depreciation (+5%) grew far slower than revenue (+38%); raw material cost % rose 620bps but was more than offset by fixed-cost absorption. The PAT of ₹61.7 Cr (+301% YoY) confirms a sustained turnaround from the trough in FY24.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹554.29 Cr | 38.0% | 14.6% |
| EBIT | ₹79.34 Cr | 317.4% | |
| Net profit | ₹61.7 Cr | 301.1% | |
| EPS | ₹28.24 | 301.1% | |
| EBIT margin | 14.6% |
P&L walk
Revenue surged 38% YoY to ₹554 Cr driven by volume recovery and pass-through of input costs; OPM expanded 1070bps to 14.6%, the 5th straight quarter of expansion, as cost of materials % rose (adverse mix) but employee costs and depreciation grew well below revenue, generating operating leverage on a fixed-cost base.
Key positives
- Revenue recovery: ₹554 Cr, +38% YoY, after 4 quarters of YoY decline.
- OPM expanded 1070bps YoY to 14.6% — 5th consecutive quarter of expansion.
- Employee cost grew only 12% vs revenue +38% — clear operating leverage.
- Depreciation grew just 5.2% — fixed assets not expanding rapidly, aiding margin.
- Low leverage: D/E 0.01, finance cost dropped 42.5% YoY.
- EPS ₹28.24, strong growth with no dilution.
Key concerns
- Gross margin compression: raw material cost as % of revenue rose 620bps to 66.9% — potential input-cost headwind if revenue growth slows.
- Excise-related contingent liability of ₹22,927 Lakh remains unresolved; auditor emphasis of matter (note 3).
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