Electrotherm(I) Q2 FY27 Results (NSE: ELECTHERM)
Signal: Loss narrowed
The read
The topline inflected positively to ₹912.43 crore, +12.1% YoY after Q1FY27's +9.5%, but earnings quality deteriorated as gross margin compressed 49bps to 27.1%, Special Steel lost ₹47.82 crore, and the reported ₹19.97 crore loss excludes ₹41.70 crore of quarterly interest required by the auditor's qualification.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹912.43 Cr | +12.1% | -0.1% |
| Net profit | ₹-19.97 Cr | +7.6% | |
| EPS | ₹-15.67 | +7.7% | |
| EBIT margin | N/A |
P&L walk
Revenue recovered to ₹912.43 crore, +12.1% YoY and broadly flat QoQ, but gross margin slipped to 27.1% from 27.6% and the group reported a ₹19.97 crore loss, with the ₹47.82 crore Special Steel loss overwhelming the ₹23.80 crore Engineering & Technologies profit.
Segments
Special Steel was the clear drag: it generated ₹541.57 crore revenue but a ₹47.82 crore loss, versus Engineering & Technologies' ₹363.75 crore revenue and ₹23.80 crore profit; consolidated and standalone PAT differed by only ₹0.04 crore.
Key positives
- Revenue increased 12.1% YoY to ₹912.43 crore after 9.5% YoY growth in Q1FY27, although it was flat QoQ.
- Engineering & Technologies generated ₹23.80 crore of segment profit on ₹363.75 crore revenue and more than offset the ₹0.74 crore Electric Vehicle segment loss.
- Reported finance cost declined 63.6% YoY to ₹2.61 crore and depreciation rose only 6.7% YoY, below revenue growth.
Key concerns
- Special Steel produced a ₹47.82 crore loss on ₹541.57 crore revenue, overwhelming the ₹23.80 crore Engineering & Technologies profit.
- Gross margin contracted 49bps YoY to 27.1% as material, purchase and inventory costs rose to 72.9% of revenue from 72.4%.
- The reported ₹19.97 crore consolidated loss understates the quarter's loss by ₹41.70 crore because interest on a legacy NPA loan was not provided.
- Inventory rose to ₹713.61 crore from ₹570.63 crore while H1 operating cash flow fell 77.1% YoY to ₹38.20 crore.
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