Chemfab Alka. Q2 FY27 Results (NSE: CHEMFAB)

28 Oct 2026 · Analysis by Alpha Inflection

Signal: Margin expansion

The read

The operating recovery is incomplete: consolidated revenue grew 3.4% YoY and EBITDA margin expanded 184bps to 9.3%, but gross margin compressed 601bps as raw-material intensity rose to 40.7%, PVC-O Pipes swung to a ₹317.27 lakh loss, and PAT fell to a ₹210.81 lakh loss after the ₹573.04 lakh profit in the preceding quarter.

P&L walk

Consolidated revenue increased 3.4% YoY to ₹7561.47 lakh, but gross margin compressed 601bps to 65.1% as raw-material intensity rose to 40.7%; lower direct manufacturing and other expenses lifted EBITDA margin to 9.3%, yet higher depreciation and finance cost left EBIT at -₹85.97 lakh and PAT at -₹210.81 lakh.

Segments

Chemicals and related Products turned around to a ₹231.75 lakh segment profit from a ₹462.96 lakh loss YoY on revenue of ₹6922.09 lakh, but PVC-O Pipes collapsed to a ₹317.27 lakh loss from a ₹747.18 lakh profit despite revenue of ₹639.49 lakh, dragging the group into a ₹210.81 lakh consolidated loss.

Key positives

• Chemicals and related Products delivered ₹6922.09 lakh revenue and ₹231.75 lakh segment profit, reversing a ₹462.96 lakh YoY loss.
• Consolidated EBITDA rose 28.8% YoY to ₹703.68 lakh while revenue rose 3.4%, lifting EBITDA margin 184bps to 9.3%.
• H1 operating cash flow improved to ₹2682.54 lakh from an outflow of ₹1082.81 lakh in H1FY26.

Key concerns

• Gross margin compressed 601bps YoY to 65.1% as raw-material cost rose to 40.7% of revenue from 31.4%; revenue grew 3.4%, so the company absorbed part of the cost increase.
• PVC-O Pipes swung from a ₹747.18 lakh segment profit to a ₹317.27 lakh loss, a ₹1064.45 lakh adverse YoY movement.
• Finance cost rose 26.7% YoY to ₹246.00 lakh and depreciation rose 19.4% to ₹789.65 lakh, limiting conversion of EBITDA into EBIT and PAT.

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