Deep Industries Q1 FY27 Results (NSE: DEEPINDS)
Signal: Growth reaccelerated
The read
Consolidated revenue surged 61.6% YoY, reversing Q4's exceptional loss, driven by volume growth and input cost efficiency (gross margin expanded ~670bps). Net profit soared 412.7% YoY, aided by a 30.5% YoY reduction in finance cost and higher other income. However, EBITDA margin was flat YoY (-8bps) as higher other expenses offset gross margin gains. Auditor flagged an ECL provision of ₹1,110.49 lakhs on trade receivables—a key concern for earnings quality. The approved ESOP scheme of 15 lakh options could dilute future EPS if exercised.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹199.5 Cr | +61.6% | +43.1% |
| Net profit | ₹85.38 Cr | +412.7% | |
| EPS | ₹13.34 | +45.2% | |
| EBIT margin | 40.9% |
P&L walk
Revenue growth of 61.6% YoY driven by volume/mix, gross margin expanded ~670bps (cost of materials % fell from 49.0% to 42.3%) due to operating leverage and better execution; EBITDA margin was flat YoY due to higher other expenses; net profit surged 412.7% YoY, aided by lower finance cost and higher other income.
Key positives
- Consolidated revenue grew 61.6% YoY to ₹19,950.00 lakh, accelerating from +48.7% YoY in Q4FY26.
- Gross margin expanded ~670bps YoY (raw material cost as % of revenue fell from 49.0% to 42.3%), indicating strong input cost management.
- Finance cost declined 30.5% YoY, supporting bottom-line growth.
- Consolidated PAT surged 412.7% YoY to ₹8,537.61 lakh, reversing the prior quarter's exceptional loss.
- EPS improved 45.2% YoY to ₹13.34, reflecting operational recovery.
- Order win from ONGC (₹83.81 Cr, 3-year charter) adds revenue visibility.
Key concerns
- EBITDA margin was flat YoY at 40.9% (-8bps) as higher other expenses offset gross margin gains.
- Auditor drew attention to an ECL provision of ₹1,110.49 lakhs (₹11.10 Cr) against aged trade receivables, indicating potential collection risks.
- Standalone PAT growth (+18.3% YoY) lagged revenue growth significantly, dragged by higher tax and exceptional items in base period.
- Approval of 15 lakh ESOP options could dilute equity if exercised, though not yet granted.
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