Eco Recyc. Q1 FY27 Results (NSE: ECORECO)
Signal: Margin expansion
The read
The key inflection is the return to YoY revenue growth of 75.2% after three consecutive quarters of decline, but the quality of the recovery is mixed: gross margin compressed 351bps as raw-material and inventory cost rose to 35.76% of revenue, while consolidated PAT growth of 13.3% was driven by subsidiary profit and lower operating-cost intensity rather than stronger standalone earnings.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹16.19 Cr | +75.2% | -13.0% |
| Net profit | ₹9.17 Cr | +13.3% | |
| EPS | ₹4.49 | +11.1% | |
| EBIT margin | 56.27% |
P&L walk
Consolidated revenue was ₹1,619 lakh, +75.2% YoY but -13.0% QoQ; raw-material and inventory cost rose to 35.76% of revenue from 32.27% YoY, compressing gross margin by 351bps, while EBITDA margin improved 162bps YoY to 56.27%; PAT grew 13.3% to ₹917 lakh mainly because subsidiary earnings more than offset lower other income.
Segments
The company reports a single e-waste management segment, but consolidated PAT of ₹917 lakh versus standalone PAT of ₹687 lakh shows subsidiaries added ₹230.09 lakh of profit, led by Ecoreco Park Private Limited's ₹230.03 lakh profit.
Key positives
- Consolidated revenue reached ₹1,619 lakh, +75.2% YoY, reversing the -18.9%, -40.4% and other recent declines in the prior results series.
- Operating margin rose 162bps YoY to 56.27% because employee and other operating expenses grew 6.6%, versus revenue growth of 75.2%.
- Subsidiaries contributed ₹230.09 lakh of profit, lifting consolidated PAT to ₹917 lakh versus standalone PAT of ₹687 lakh.
- Finance cost declined 46.7% YoY to ₹8 lakh, and management states the company has no financial borrowings.
Key concerns
- Gross margin compressed 351bps YoY to 64.24% as raw-material and inventory cost increased to 35.76% of revenue from 32.27%; revenue grew 75.2% while these costs grew 94.3%, indicating cost absorption rather than full pass-through.
- Standalone PAT rose only 2.4% YoY to ₹687 lakh despite 75.2% revenue growth because standalone other income fell 90.5% to ₹28 lakh.
- Revenue declined 13.0% QoQ and operating margin fell 1310bps from 69.37% QoQ, showing substantial quarter-to-quarter volatility.
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