Emk.Global Fin. Q1 FY27 Results (NSE: EMKAY)
Signal: Margin expansion
The read
Consolidated revenue and PAT surged YoY, reversing the declining trend of the previous four quarters. EBITDA margin expanded significantly as employee cost growth moderated and fee income recovered. The standalone operating margin improved to 8.4% from 4.3% a year ago. However, QoQ revenue declined 38% from Q4FY26, which is seasonally strong. EPS growth lagged PAT growth due to dilution from warrant conversions, a trend likely to continue as remaining warrants are exercised.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹91.92 Cr | 25.96% | -38.07% |
| EBIT | ₹13.02 Cr | 69.2% | |
| Net profit | ₹9.11 Cr | 90.4% | |
| EPS | ₹3.39 | 80.3% | |
| EBIT margin | 14.16% |
P&L walk
Revenue grew 26% YoY, reversing the declining trend of recent quarters. EBITDA margin expanded 291bps YoY to 17.4% as employee cost growth (21.4%) lagged revenue growth. PAT surged 90% boosted by a turnaround in associate income (₹109 Lakhs vs loss). EPS rose 80% but lagged PAT due to 4.4% equity dilution from warrant conversions.
Key positives
- Consolidated revenue growth of 26% YoY, breaking a streak of declining YoY revenue in the prior four quarters.
- EBITDA margin expanded 291bps YoY to 17.4%, driven by employee cost efficiency (cost-to-revenue down from 58.3% to 56.1%).
- Standalone operating margin (PBT/Revenue) improved to 8.41% from 4.27% YoY, reflecting strong fee income and cost control.
- PAT up 90% YoY, supported by a turnaround in associate income (₹109 Lakhs vs loss of ₹2 Lakhs in Q1FY26).
Key concerns
- QoQ revenue declined 38% from Q4FY26, though Q4 is seasonally strong; sequential trend needs monitoring.
- EPS growth (80.3%) lagged PAT growth (90.4%) due to equity dilution from warrant conversions (equity base increased 4.4% in the quarter).
- Debt equity ratio increased to 0.45 from 0.42 as at March 2026, indicating higher leverage.
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