Century Enka Q2 FY27 Results (NSE: CENTENKA)
Signal: Growth decelerated
The read
Q2FY27 marks a sharp reversal from the recent margin arc: revenue rose 36.9% YoY to ₹55,823 lakh, but gross margin fell 772bps to 33.15% and PAT declined 17.2% to ₹1,849 lakh; the quarter is below the Q1FY27 peak, with raw-material intensity rising 11.33pp to 66.84% and six-month operating cash flow turning negative at ₹1,417 lakh.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹558.23 Cr | +33.9% | -1.0% |
| EBIT | ₹27.51 Cr | +8.2% | |
| Net profit | ₹18.49 Cr | -17.2% | |
| EPS | ₹8.46 | -17.2% | |
| EBIT margin | N/A |
P&L walk
Revenue increased to ₹55,823 lakh, while gross margin compressed to 33.15% from 40.87% as raw-material cost rose to 66.84% of revenue from 55.51%; depreciation rose 8.3% and PAT declined 17.2% to ₹1,849 lakh.
Key positives
- Revenue increased 36.9% YoY to ₹55,823 lakh and was broadly stable QoQ at ₹55,429 lakh, indicating demand remained above the year-ago base.
- Power and fuel intensity improved to 10.12% of revenue from 11.34% YoY, while employee-cost intensity improved to 6.53% from 7.69%.
- PPE plus CWIP increased to ₹79,047 lakh from ₹76,856 lakh at 31-Mar-26 while depreciation rose to ₹1,467 lakh, a clean capex-maturity cross-check.
- Finance costs declined 37.3% YoY to ₹47 lakh, keeping balance-sheet interest burden immaterial.
Key concerns
- Gross margin compressed 772bps YoY to 33.15% as raw-material cost increased to 66.84% of revenue from 55.51%; the filing does not disclose a driver.
- PAT fell 17.2% YoY to ₹1,849 lakh despite 36.9% revenue growth, showing that higher input intensity absorbed the sales growth.
- Six-month operating cash flow was negative at ₹1,417 lakh versus positive ₹4,585 lakh in the year-ago period, alongside inventory rising to ₹31,323 lakh and receivables to ₹21,632 lakh.
- The Q2 pre-tax margin of 4.93% was below the prior quarter's 14.1% based on profit before exceptional items and tax, indicating a substantial sequential earnings reset.
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