Eureka Forbes Q2 FY27 Results (NSE: EUREKAFORB)
Signal: Steady quarter
The read
The inflection is revenue acceleration to +15.1% YoY from +11.6% in Q4FY26 and +15.1% in Q1FY27, but gross margin contracted about 170bps YoY to 55.4%; PAT still grew 17.8% to ₹7409.66 lakh because employee-cost intensity eased and finance costs fell YoY, while weak H1 operating cash flow of -₹11713.54 lakh makes working-capital conversion the main constraint.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹888.47 Cr | +15.1% | +26.9% |
| Net profit | ₹74.1 Cr | +17.8% | |
| EPS | ₹3.81 | +18.0% | |
| EBIT margin | N/A |
P&L walk
Revenue increased to ₹88847.00 lakh, +15.1% YoY and +26.9% QoQ, while gross margin fell to about 55.4% from 57.1% YoY; employee costs grew 13.7% and finance costs declined 6.4% YoY, supporting PAT growth of 17.8% to ₹7409.66 lakh.
Key positives
- Consolidated revenue reached ₹88847.00 lakh, +15.1% YoY, accelerating from +7.9% in Q3FY26 and +11.6% in Q4FY26.
- Employee benefits expense grew 13.7% YoY versus 15.1% revenue growth, reducing employee-cost intensity to 11.0% from 11.2%.
- PAT rose 17.8% YoY to ₹7409.66 lakh and EPS rose 18.0% to ₹3.81, indicating no material PAT-to-EPS dilution in the quarter.
- Finance costs declined 6.4% YoY to ₹210.16 lakh despite higher revenue.
Key concerns
- Gross margin compressed approximately 170bps YoY to 55.4% even though raw material cost improved slightly to 50.8% of revenue from 51.0%; the filing does not identify the cause.
- H1 operating cash flow was negative at ₹11713.54 lakh versus negative ₹1840.47 lakh a year earlier, despite H1 PAT of ₹13108.40 lakh.
- H1 trade and other receivables increased by ₹15147.59 lakh and inventories by ₹17164.15 lakh, indicating substantial working-capital absorption.
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