Centum Electron Q2 FY27 Results (NSE: CENTUM)
Signal: Margin pressure
The read
The operating recovery is real but not yet a margin inflection: consolidated revenue rose 58.4% YoY to ₹3,118.19 million, while EBITDA margin fell 140bps YoY to 13.5%; Q2 PAT of ₹229.27 million is cleaner than Q1's ₹1,055.00 million because discontinued operations contributed ₹942.69 million in Q1, but inventory rose ₹813.29 million in H1 and operating cash flow fell 60.0% to ₹168.20 million.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹311.82 Cr | 58.4% | 53.2% |
| Net profit | ₹22.93 Cr | +460.4% | |
| EPS | ₹15.53 | +444.9% | |
| EBIT margin | 13.5% |
P&L walk
Consolidated revenue recovered to ₹3,118.19 million, +58.4% YoY and +53.2% QoQ, while EBITDA margin declined 140bps YoY to 13.5%; PAT of ₹229.27 million was operational this quarter, unlike the prior quarter's discontinued-operations-led ₹1,055.00 million.
Segments
There is no segment split; the standalone PAT of ₹228.12 million was almost identical to consolidated PAT of ₹229.27 million, indicating negligible subsidiary contribution to the quarter's continuing earnings.
Key positives
- Revenue from operations reached ₹3,118.19 million, +58.4% YoY and +53.2% QoQ, recovering from the prior quarter's ₹2,034.66 million.
- Employee plus other expenses grew 44.8% YoY to ₹651.96 million, 13.6 percentage points slower than revenue growth, helping keep EBITDA margin at 13.5% despite gross-margin compression.
- Standalone PAT increased 76.7% YoY to ₹228.12 million and was broadly mirrored in consolidated PAT of ₹229.27 million, showing that Q2 earnings were not dependent on the prior quarter's discontinued-operations gain.
Key concerns
- Gross margin compressed 300bps YoY to 33.6%, despite reported raw-material cost declining to 68.0% of revenue from 75.2%; the filing does not disclose whether the divergence reflects inventory movements, mix or pricing.
- Operating cash flow fell 60.0% YoY to ₹168.20 million as inventories increased by ₹813.29 million and trade receivables increased by ₹103.82 million during H1FY27.
- Consolidated H1 PAT of ₹1,284.27 million includes ₹942.69 million of discontinued-operations profit in Q1, making the 1,768.5% YoY H1 PAT growth a poor indicator of recurring earnings.
- The Board proposed increasing borrowing limits from ₹500 crore to ₹1,000 crore and securing borrowings against company assets, while total borrowings stood at ₹1,335.42 million at September 30, 2026.
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