Harri. Malayalam Q1 FY27 Results (NSE: HARRMALAYA)
Signal: Margin pressure
The read
The quarter marks a reversal from Q1FY26's 7.05% margin and 19.3% revenue growth: Q1FY27 revenue grew only 7.3%, EBITDA margin fell 236bps YoY to 7.1%, and PAT fell 34.1%; rubber held up, but tea profitability deteriorated sharply and other income represented 80.9% of PBT.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹124.92 Cr | 7.3% | -15.1% |
| EBIT | ₹7.26 Cr | -22.9% | |
| Net profit | ₹3.93 Cr | -34.1% | |
| EPS | ₹2.13 | -34.1% | |
| EBIT margin | 7.1% |
P&L walk
Consolidated revenue increased 7.3% YoY to ₹12,491.86 lakh, but EBITDA declined 19.4% to ₹8.87 crore as material costs rose 19.3% and gross margin compressed; PAT fell 34.1% to ₹393.41 lakh, with other income equal to 80.9% of PBT.
Segments
Rubber remains the earnings engine with ₹6,348.16 lakh revenue and ₹571.10 lakh result, up 7.8% and 10.9% YoY respectively, while Tea revenue rose 5.8% but its result fell 77.6% to ₹86.12 lakh and dragged segment profitability.
Key positives
- Rubber revenue was ₹6,348.16 lakh, up 7.8% YoY, and rubber segment result was ₹571.10 lakh, up 10.9% YoY, making it the principal operating earnings contributor.
- Employee benefits expense rose 4.7% YoY versus 7.3% revenue growth, while finance costs declined 3.9% YoY to ₹332.29 lakh.
- Consolidated and standalone revenue were identical at ₹12,491.86 lakh, showing that the reported operating trajectory is driven by the parent business rather than the subsidiary.
Key concerns
- Gross margin compressed 412bps YoY to 70.8% as material, purchase and inventory-related costs rose to 29.2% of revenue from 25.1%; the filing does not disclose the cause.
- Tea segment result fell 77.6% YoY to ₹86.12 lakh despite 5.8% revenue growth, indicating significant mix, pricing or cost pressure in the tea business.
- EBITDA declined 19.4% YoY to ₹8.87 crore and EBITDA margin fell 236bps to 7.1%, so the quarter did not demonstrate operating leverage.
- Other income of ₹318.35 lakh represented 80.9% of consolidated PBT of ₹393.41 lakh, making reported profit quality weak despite nil tax expense.
Earnings quality: includes non-operating other income
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