GMM Pfaudler Q1 FY27 Results (NSE: GMMPFAUDLR)
Signal: Margin pressure
The read
Consolidated PAT doubled YoY to ₹23.9 Cr on 16.4% revenue growth, but the profit beat is partly driven by Rs 27 Cr forex gain netted in finance cost and high other income; core operating profit (EBIT) fell 15.6% YoY as gross margin compressed and employee costs outpaced revenue.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹924.76 Cr | 16.4% | -2.0% |
| EBIT | ₹62.93 Cr | -15.6% | |
| Net profit | ₹23.9 Cr | 114.3% | |
| EPS | ₹5.32 | 114.5% | |
| EBIT margin | 11.2% |
P&L walk
Revenue up 16.4% YoY, led by overseas (+20.4%) while India (+5.5%) lagged. Gross margin compressed 300 bps to 60.4% as employee costs (22.6% growth) outpaced revenue. EBITDA margin rose sequentially to 11.2% but was down 151 bps YoY. Finance cost halved due to ₹26.77 Cr forex gain on inter-company borrowings (note 3). EBIT fell 15.6% YoY. PAT surged 114.3% due to lower tax and higher other income (24.4% of PBT). EPS doubled, tracking PAT.
Segments
Overseas segment drove 16.4% revenue growth (₹699.63 Cr, +20.4% YoY) and contributed 71% of segment PBIT, while India segment PBIT fell 43% YoY to ₹18.28 Cr, dragging consolidated EBIT lower.
Key positives
- Revenue growth of 16.4% YoY, accelerating from Q4FY26's 8.9% and reversing the prior year's decline (Q1FY26: +1.3%).
- Overseas segment revenue jumped 20.4% YoY to ₹699.63 Cr, indicating strong global demand for process equipment.
- EBITDA margin expanded 324 bps sequentially (from 7.96% to 11.2%), driven by lower raw material costs relative to Q4.
- Finance cost more than halved YoY to ₹22.73 Cr, aided by ₹26.77 Cr forex gain on inter-company borrowings.
- EPS doubled to ₹5.32, tracking PAT growth with no dilution.
Key concerns
- Gross margin contracted 300 bps YoY to 60.4% as raw material cost % of revenue rose from 36.6% to 39.6%.
- Employee costs (including labour) grew 22.6% YoY, far outpacing revenue growth of 16.4%, pressuring margins.
- India segment PBIT halved YoY (₹18.28 Cr vs ₹32.05 Cr, -43%), suggesting domestic weakness.
- Core EBIT fell 15.6% YoY despite revenue growth, as margin compression offset volume gains.
- PAT is boosted by high other income (24.4% of PBT) and a low tax rate; operating quality is weaker.
Earnings quality: includes non-operating other income
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