Centum Electron Q1 FY27 Results (NSE: CENTUM)
Signal: Growth decelerated
The read
The apparent PAT turnaround is not an operating inflection: consolidated continuing PAT fell 36.0% YoY to ₹112.31 million and EBITDA margin contracted 425bps to 11.54%, while ₹942.69 million from discontinued operations drove reported PAT to ₹1,055.00 million; the core thesis therefore remains dependent on restoring margin after an 860bps gross-margin compression.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹204.15 Cr | +14.4% | -40.0% |
| Net profit | ₹105.5 Cr | +2,238.6% | |
| EPS | ₹71.47 | +1,704.8% | |
| EBIT margin | 11.54% |
P&L walk
Consolidated operating revenue rose 14.4% YoY to ₹2,041.49 million, but gross margin contracted 860bps to 50.4% as raw-material cost rose to 74.0% of revenue; EBITDA fell 16.3% to ₹235.58 million, while reported PAT of ₹1,055.00 million was dominated by ₹942.69 million from discontinued operations.
Key positives
- Consolidated revenue from operations rose 14.4% YoY to ₹2,041.49 million, reversing the 13.2% YoY decline reported in the immediately preceding quarter.
- Employee benefits plus other expenses grew 6.0% YoY versus 14.4% revenue growth, providing partial opex containment despite a 425bps EBITDA-margin decline.
- The group recognized ₹942.69 million of profit from discontinued operations after the overseas business transfer process, materially reducing the direct earnings drag from that activity.
Key concerns
- Continuing-operations PAT fell 36.0% YoY to ₹112.31 million despite 14.4% revenue growth, showing weak conversion of sales into recurring earnings.
- Gross margin compressed 860bps YoY to 50.4% as raw-material cost rose to 74.0% of revenue from 65.4%; the filing does not disclose the driver, and no pricing-power evidence is provided.
- Finance costs rose 35.4% YoY to ₹44.18 million, while EBITDA fell 16.3% YoY to ₹235.58 million.
- Standalone PAT fell 12.4% YoY to ₹135.33 million, confirming that the consolidated profit surge is not being generated by the parent operating business.
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