Crizac Q1 FY27 Results (NSE: CRIZAC)
Signal: Margin expansion
The read
Revenue declined YoY for the first time in recent quarters, a negative inflection, but margins expanded due to lower commission costs and an accounting change (depreciation method switch). The quality of earnings is mixed: the depreciation change added ~₹1.25 Cr to profit, while employee costs rose sharply. PAT growth was entirely margin-driven, not revenue-led.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹201.21 Cr | -4.0% | -80.7% |
| EBIT | ₹64.86 Cr | 4.4% | |
| Net profit | ₹47.13 Cr | 2.9% | |
| EPS | ₹2.69 | 2.7% | |
| EBIT margin | 34% |
P&L walk
Revenue declined 4% YoY due to seasonal dip, but gross margin expanded 160bps to 37.5% on lower commission costs, aiding EBITDA margin expansion to 34% (+200bps YoY), though employee cost ratio doubled to 5% and the depreciation method change artificially reduced charge by ₹1.25 Cr.
Key positives
- Gross margin expanded 160bps YoY to 37.5%, reflecting better control over agent commission costs.
- EBITDA margin improved to 34% from 32% YoY, supported by gross margin and lower depreciation.
- PAT grew 2.9% YoY despite revenue decline, aided by other income and lower depreciation.
Key concerns
- Revenue declined 4% YoY, breaking a multi-quarter growth trend; Q1 seasonality was weaker than last year.
- Employee cost as % of revenue surged to 5.0% from 2.6% YoY, indicating fixed cost growth outpacing revenue.
- Depreciation method change (WDV to SLM) reduced depreciation by ₹1.25 Cr, inflating EBITDA margin artificially; without this, EBITDA margin would have been ~33.4%.
Research and educational content only. Not investment advice.