Diamond Power Q1 FY27 Results (NSE: DIACABS)
Signal: Growth reaccelerated
The read
The growth trajectory remains powerful, with consolidated revenue at ₹68,987.64 lakh, +128.6% YoY, and PAT at ₹5,844.66 lakh, +256.2% YoY; however, gross margin fell 165bps to 17.72% as material costs rose to 87.00% of revenue, making the next quarter's margin and pass-through evidence more important than the headline growth. Operating margin at 11.15% is the fourth consecutive quarter of YoY expansion in the recent series, but it is below the 15% reached in Q3FY26.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹689.88 Cr | +128.6% | -0.9% |
| Net profit | ₹58.45 Cr | +256.2% | |
| EPS | ₹1.11 | +258.1% | |
| EBIT margin | 11.15% |
P&L walk
Consolidated revenue was ₹68,987.64 lakh, +128.6% YoY and -0.9% QoQ, but gross margin fell to 17.72% from 19.37% as material costs reached 87.00% of revenue; operating margin improved to 11.15%, while PAT rose to ₹5,844.66 lakh with tax of only ₹24.62 lakh.
Segments
The subsidiary contributed ₹34,543.77 lakh of revenue, approximately half of consolidated revenue, but only ₹135.84 lakh of PAT, indicating that the consolidated earnings uplift remains concentrated in the holding company rather than the subsidiary.
Key positives
- Consolidated revenue reached ₹68,987.64 lakh, +128.6% YoY, extending the sharp scale-up from ₹30,182.29 lakh in Q1FY26.
- Operating margin improved to 11.15% from approximately 10.24% YoY, marking the fourth consecutive quarter of YoY margin expansion in the recent series.
- Employee benefits plus other expenses rose to ₹4,531.37 lakh, +64.2% YoY, materially slower than revenue growth of +128.6%, supporting operating-margin expansion.
- EPS rose to ₹1.11 from ₹0.31, +258.1% YoY, broadly tracking PAT growth without a current-period PAT-to-EPS dilution warning.
- The company states that PPE records and depreciation have been fully regularised after completion of the physical verification and reconciliation exercise.
Key concerns
- Gross margin compressed 165bps YoY to 17.72%, while material and inventory cost increased to 82.27% of consolidated revenue from 80.63%; the filing does not disclose the reason.
- Finance costs increased 285.9% YoY to ₹1,423.95 lakh, limiting conversion of operating profit into pre-tax profit.
- The consolidated subsidiary contributed ₹34,543.77 lakh of revenue but only ₹135.84 lakh of PAT, so the subsidiary's earnings conversion remains weak.
- Consolidated revenue declined 0.9% QoQ from ₹69,586.57 lakh and operating margin slipped approximately 1bp QoQ from 11.16%, indicating sequential momentum was not accelerating.
Research and educational content only. Not investment advice.