GNG Electronics Q1 FY27 Results (NSE: EBGNG)
Signal: Growth decelerated
The read
Consolidated results show strong YoY revenue (+32.1%) and PAT (+56.2%) growth, with gross margin expansion of ~870bps as inventory swing reverses. EBITDA margin expanded 30bps YoY to 10.26% despite employee cost growing faster than revenue — operating leverage from scale partially offset. EPS growth lagged PAT due to equity dilution. QoQ sequential decline from Q4FY26 is seasonal (Q4 typically strong). The company is executing its refurbished ICT distribution strategy with a recent Redington partnership as a growth catalyst.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹412.46 Cr | +32.1% | -36.7% |
| EBIT | ₹39.04 Cr | +38.1% | |
| Net profit | ₹28.93 Cr | +56.2% | |
| EPS | ₹2.54 | +33.0% | |
| EBIT margin | 9.47% |
P&L walk
Revenue grew 32.1% YoY driven by volume/scale; gross margin improved sharply as direct cost (incl. inventory change) fell to 75.3% of rev vs 84.0% a year ago. EBITDA margin expanded 30bps YoY to 10.26%, aided by operating leverage (employee cost +42.9% vs rev +32.1%). Finance cost grew +30.0% YoY, slower than rev. PAT growth (+56.2%) outpaced operating profit growth due to higher other income and lower tax rate. EPS (+33.0%) lagged PAT growth as equity base expanded 17.4%.
Key positives
- Revenue growth +32.1% YoY to ₹4,124.61 Mn, driven by volume and distribution expansion.
- Gross margin improved 870bps YoY to 24.7%, led by inventory swing and better cost management.
- PAT grew +56.2% YoY to ₹289.30 Mn, outpacing revenue growth on operating leverage and higher other income.
- EBITDA margin expanded 30bps YoY to 10.26%, despite employee cost growing faster than revenue.
- Redington distribution partnership announced July 2026 to accelerate nationwide expansion of refurbished ICT solutions.
Key concerns
- EPS growth (+33.0%) lagged PAT growth (+56.2%) due to ~17.4% equity dilution from share issuance.
- QoQ revenue declined 36.7% from Q4FY26, typical seasonality but magnitude notable.
- Standalone gross margin volatility due to large inventory changes — sustainable margin profile unclear.
- Finance costs remain elevated at 3.36% of revenue, though growing slower than revenue.
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