Fairchem Organic Q2 FY27 Results (NSE: FAIRCHEMOR)
Signal: Margin expansion
The read
The operating inflection is continuing: revenue growth remained strong at 49.7% YoY despite a 5.2% QoQ decline, while gross margin expanded 276bps YoY and EBITDA margin reached 10.5%, the second consecutive quarterly margin tailwind. PAT of ₹1,016.76 lakh was therefore supported by operations rather than a material other-income or tax distortion, but the sustainability of the raw-material benefit remains unproven because management did not disclose its source.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹166.92 Cr | +49.7% | -5.2% |
| EBIT | ₹14.68 Cr | +939.0% | |
| Net profit | ₹10.17 Cr | +1,216.7% | |
| EPS | ₹8.07 | +1,267.8% | |
| EBIT margin | 10.5% |
P&L walk
Revenue of ₹16,692.38 lakh grew 49.7% YoY but fell 5.2% QoQ; gross margin expanded 276bps YoY to 23.1% as raw-material cost fell to 75.2% of revenue from 88.5%, EBITDA margin rose 675bps to 10.5%, and PAT reached ₹1,016.76 lakh versus ₹77.22 lakh, with the profit surge primarily tracking operating improvement.
Segments
The single Speciality Chemicals segment drove the group, with segment result rising to ₹1,482.84 lakh from ₹178.36 lakh YoY while segment revenue grew 49.7%; there is no subsidiary or second segment to explain a consolidated divergence.
Key positives
- Revenue reached ₹16,692.38 lakh, up 49.7% YoY despite a 5.2% QoQ decline, indicating substantial year-on-year recovery in the specialty-chemical business.
- Gross margin expanded 276bps YoY to 23.1% as raw-material cost declined to 75.2% of revenue from 88.5%; this is the second consecutive quarterly gross-margin tailwind.
- EBITDA margin rose 675bps YoY to 10.5%; employee benefits increased only 14.4% YoY against 49.7% revenue growth, while depreciation increased 2.8%.
- H1 operating cash flow remained positive at ₹2,405.23 lakh and borrowings declined by ₹1,512.93 lakh during H1FY27.
- EPS of ₹8.07 grew 1,267.8% YoY, slightly ahead of PAT growth after the company extinguished 4,25,000 shares in the buyback.
Key concerns
- Revenue declined 5.2% sequentially from ₹17,614.57 lakh to ₹16,692.38 lakh, so the next quarter must confirm that the YoY recovery is not losing momentum.
- The 276bps gross-margin expansion is not attributed in the filing; input-cost tailwind may not be durable without evidence of pricing, mix or sustained raw-material deflation.
- Trade receivables rose to ₹10,017.55 lakh from ₹6,812.73 lakh at March 2026, while H1 operating cash flow fell to ₹2,405.23 lakh from ₹3,065.82 lakh YoY.
- Finance costs rose 93.6% YoY to ₹118.05 lakh even after the sequential decline, warranting monitoring of borrowing costs and working-capital funding.
Research and educational content only. Not investment advice.