Galaxy Surfact. Q2 FY27 Results (NSE: GALAXYSURF)
Signal: Steady quarter
The read
The earnings inflection is gross-margin-led: consolidated gross margin expanded 304bps YoY as material intensity fell to 73.4%, driving derived EBITDA growth of 68.4% versus revenue growth of 36.5% and PAT growth of 80.1%; however, Q2 EBITDA margin of 10.8% was down 335bps QoQ from the exceptional 14.2% Q1 level, while weak H1 operating cash flow of ₹76.57 Cr versus PAT of ₹285.67 Cr highlights working-capital risk.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,810.41 Cr | +36.5% | +1.6% |
| Net profit | ₹119.75 Cr | +80.1% | |
| EPS | ₹33.78 | +80.2% | |
| EBIT margin | N/A |
P&L walk
Revenue increased to ₹1,810.41 Cr, +36.5% YoY and +1.6% QoQ; gross margin expanded to 27.5% from 24.5% YoY as material cost intensity fell to 73.4%, while EBITDA margin improved to 10.8% YoY but normalized from 14.2% in Q1; PAT rose 80.1% to ₹119.75 Cr.
Segments
There are no reportable segments, but subsidiaries materially lift the group: consolidated Q2 PAT of ₹119.75 Cr was ₹53.28 Cr above standalone PAT of ₹66.47 Cr, including one subsidiary's reported PAT contribution of ₹31.53 Cr.
Key positives
- Consolidated revenue reached ₹1,810.41 Cr, +36.5% YoY, while PAT rose 80.1% to ₹119.75 Cr.
- Gross margin expanded 304bps YoY to 27.5% as material intensity declined to 73.4% of revenue from 76.5%.
- Derived EBITDA rose 68.4% YoY to ₹195.88 Cr versus revenue growth of 36.5%, a +31.9pp growth gap; employee cost grew only 29.8% and depreciation 16.5%.
- EPS rose 80.2% YoY to ₹33.78 and tracked PAT, with the pat-to-EPS cross-check clean.
- The company declared an interim dividend of ₹18 per share.
Key concerns
- Q2 EBITDA margin of 10.8% fell 335bps QoQ from 14.2% in Q1, showing that the quarter-on-quarter margin peak was not sustained.
- H1 operating cash flow of ₹76.57 Cr was only 26.8% of H1 PAT of ₹285.67 Cr after ₹379.00 Cr of receivables and other-assets absorption and ₹226.37 Cr of inventory absorption.
- Standalone other expenses rose 58.6% YoY to ₹137.42 Cr, materially faster than standalone revenue growth of 34.2%.
- Finance costs rose 36.7% YoY on a consolidated basis and 48.3% YoY on a standalone basis.
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