Endurance Tech. Q2 FY27 Results (NSE: ENDURANCE)
Signal: Margin pressure
The read
The trajectory is still high-growth but margin-negative: consolidated revenue accelerated 33.6% YoY to ₹4,786.18 Cr, yet gross margin contracted 592bps and EBITDA margin fell 180bps to 11.7%; PAT growth of 20.7% was partly lifted by the ₹35.63 Cr exceptional gain, so the next inflection depends on raw-material intensity reversing rather than further revenue acceleration.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹4,786.18 Cr | 33.6% | 10.9% |
| EBIT | ₹320.58 Cr | 5.4% | |
| Net profit | ₹274.29 Cr | 20.7% | |
| EPS | ₹19.5 | 20.7% | |
| EBIT margin | 11.7% |
P&L walk
Consolidated revenue increased 33.6% YoY to ₹4,786.18 Cr, but gross margin fell 592bps to 36.8% as raw-material intensity rose to 65.5%; EBITDA grew only 15.5% to ₹559.04 Cr, while PAT rose 20.7% to ₹274.29 Cr aided by a ₹35.63 Cr exceptional gain.
Segments
The group materially outperformed the parent: consolidated revenue of ₹4,786.18 Cr exceeded standalone revenue of ₹3,752.73 Cr by ₹1,033.45 Cr and consolidated PAT of ₹274.29 Cr exceeded standalone PAT of ₹213.48 Cr by ₹60.81 Cr, indicating subsidiaries contributed positively despite lower group margins.
Key positives
- Consolidated revenue rose 33.6% YoY to ₹4,786.18 Cr, accelerating from 30.0% YoY growth in Q1FY27 and exceeding standalone growth of 40.1% on a larger group base.
- Employee plus other operating expenses grew 14.0% YoY to ₹1,201.81 Cr, 19.6 percentage points slower than revenue growth, limiting but not overcoming material-cost pressure.
- Operating cash flow increased 22.0% YoY to ₹800.60 Cr in H1FY27, while net debt excluding leases declined by ₹4.27 Cr to ₹173.63 Cr.
- PPE increased to ₹4,829.38 Cr from ₹4,593.86 Cr at year-end while depreciation rose 32.5% YoY, a clean capex-maturity signal.
Key concerns
- Consolidated gross margin compressed 592bps YoY to 36.8% as raw-material cost rose to 65.5% of revenue from 57.8%; the filing does not disclose the specific cause or timing of recovery.
- EBITDA grew 15.5% YoY to ₹559.04 Cr, lagging 33.6% revenue growth, and EBITDA margin fell 180bps to 11.7%.
- Finance costs increased 82.4% YoY to ₹24.92 Cr at the consolidated level and 227.6% YoY to ₹7.47 Cr standalone.
- H1FY27 working capital absorbed ₹878.52 Cr through inventory and receivables, including ₹406.48 Cr of inventory and ₹424.52 Cr of receivables outflow on the consolidated cash-flow statement.
Research and educational content only. Not investment advice.