Cheviot Company Q1 FY27 Results (NSE: CHEVIOT)

5 Aug 2026 · Analysis by Alpha Inflection

Signal: Margin expansion

The read

Revenue grew 42.5% YoY with strong volume/pricing, but gross margin compressed sharply (1625bps YoY) due to higher raw material costs. Operating leverage from employee and other expense declines (down ~11% YoY each) more than offset the gross margin drag, expanding EBITDA margin by 204bps to 33.7%. Reported PAT was also boosted by ₹36.4 Cr other income (65.7% of PBT). Core operating strength is evident, but sustainability of other income and raw material inflation are key monitors.

P&L walk

Operating leverage from fixed-cost absorption (employee & other expenses down ~11% YoY) offset a 1625bps gross margin compression, expanding EBITDA margin 204bps. Other income (65.7% of PBT) boosted reported PAT, but core operational strength is evident.

Key positives

• Revenue growth of 42.5% YoY, accelerating from 22% in prior quarter (implied), driven by strong demand.
• EBITDA margin expanded 204bps YoY to 33.7% despite 1625bps gross margin compression, demonstrating operating leverage and cost discipline.
• Employee and other expenses declined 11-12% YoY in absolute terms, indicating strong fixed-cost absorption on revenue growth.
• PAT growth of 57.7% YoY, outpacing revenue due to operating leverage and other income.

Key concerns

• Gross margin contracted 1625bps YoY due to raw material cost surge (68.7% vs 55.9% of revenue); pricing pass-through may be limited.
• Other income of ₹36.4 Cr (65.7% of PBT) is from FVTPL gains and is non-operating, inflating reported profit; core operating PAT was lower.
• QoQ comparison shows PAT declined 12.4% from Q4FY26 (if computed from XBRL), but Q4 had large other income loss; sequential trend needs monitoring.

Earnings quality: includes non-operating other income

View original filing

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