Gallantt Ispat L Q1 FY27 Results (NSE: GALLANTT)
Signal: Margin expansion
The read
Q1FY27 revenue flat (+1.6% YoY) with OPM expanding 220bps to 14.4% despite raw material cost pressure, indicating cost control and lower other expenses. Net profit fell 29% YoY solely due to higher effective tax rate (32.8% vs 19.7% YoY), not operational weakness; operational PAT (pre-tax) actually rose 7% YoY. Auditor resignation (Maroti & Associates) flagged, but auditor letter cites resource constraints and no unresolved issues. CFO also resigned effective mid-August; new CFO appointed. These governance changes are the key concern for investors.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,145.67 Cr | 1.6% | -4.9% |
| EBIT | ₹164.81 Cr | -23.8% | |
| Net profit | ₹123.67 Cr | -28.9% | |
| EPS | ₹5.13 | -28.7% | |
| EBIT margin | 14.4% |
P&L walk
Revenue flat YoY at ₹1,145.67 Cr; raw material cost rose 470bps to 77% of revenue, compressing gross margin but OPM expanded 220bps YoY to 14.4% helped by lower other expenses and employee cost; other income jumped 168% YoY to ₹18.30 Cr, lifting PBT; net profit fell 29% YoY to ₹123.67 Cr due to higher effective tax rate (32.8% vs 19.7% YoY).
Segments
Single reportable segment — steel and allied products; no segment-wise disclosure.
Key positives
- OPM expanded 220bps YoY to 14.4% despite raw material cost inflation of 470bps — cost controls effective.
- Other expenses reduced to 7.8% of revenue from 8.3% YoY — operational efficiency.
- Finance cost fell 38.2% QoQ — debt reduction or lower working capital utilisation.
- PAT before tax (PBT) grew 7% YoY to ₹164.81 Cr — core operations healthy.
Key concerns
- Net profit fell 28.9% YoY due to higher effective tax rate (32.8% vs 19.7% YoY) — tax normalisation post lower base.
- Revenue growth flat (1.6%) — volume or realisation pressures in steel market.
- Raw material cost rose to 77.0% of revenue from 72.3% YoY — input cost margin squeeze.
- Auditor resignation and CFO resignation in same quarter — governance overhang.
Research and educational content only. Not investment advice.