Chemcon Special. Q2 FY27 Results (NSE: CHEMCON)
Signal: Steady quarter
The read
The key inflection is variable-cost improvement rather than top-line acceleration: Q2 revenue growth moderated to 21.8% YoY from 24.2% in Q1FY27 and declined 1.6% QoQ, while gross margin expanded to 50.83% from 38.96% YoY as raw-material intensity fell to 49.17% from 61.04%; PAT still rose 30.8% to ₹751.90 lakh, but higher depreciation and the flagged depreciation-to-asset-base divergence warrant monitoring.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹65.45 Cr | 21.8% | -1.6% |
| Net profit | ₹7.52 Cr | 30.8% | |
| EPS | ₹2.05 | 30.6% |
P&L walk
Standalone revenue was ₹6,544.88 lakh, up 21.8% YoY but down 1.6% QoQ; gross margin expanded to 50.83% from 38.96% as raw-material intensity fell, supporting 30.8% PAT growth to ₹751.90 lakh despite higher depreciation and finance costs.
Key positives
- Gross margin expanded 1,187bps YoY to 50.83%, with raw-material cost falling to 49.17% of revenue from 61.04%; the filing does not disclose whether this reflects input deflation, pricing or mix.
- PAT increased 30.8% YoY to ₹751.90 lakh despite other income declining 9.9% to ₹355.57 lakh, indicating the profit increase was not driven by higher other income.
- H1 operating cash flow was ₹4,309.02 lakh against H1 PAT of ₹1,848.19 lakh, while net debt declined to ₹1,632.30 lakh from ₹4,275.06 lakh at year-end.
Key concerns
- Revenue growth decelerated from 24.2% YoY in Q1FY27 to 21.8% in Q2FY27 and declined 1.6% sequentially to ₹6,544.88 lakh.
- Depreciation rose 37.4% YoY to ₹380.15 lakh while PPE plus CWIP declined 2.1% from year-end, creating a depreciation-to-asset-base quality flag.
- Q2 finance cost rose 619.3% YoY to ₹67.04 lakh, albeit from a low ₹9.32 lakh base and down 21.5% QoQ.
Research and educational content only. Not investment advice.