Hirect Q1 FY27 Results (NSE: HIRECT)
Signal: Margin pressure
The read
The quarter marks a sharp margin break from the prior two-quarter expansion arc: consolidated revenue grew 20.4% YoY, but EBITDA margin fell to 5.1% from 11.3% as material costs reached 84.3% of revenue and employee costs rose 115.6%; the parent delivered ₹150.91 million PAT, but EMS losses and non-controlling-interest losses pulled group PAT down to ₹65.01 million.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹258.45 Cr | +20.4% | -7.6% |
| Net profit | ₹6.5 Cr | -49.1% | |
| EPS | ₹2.74 | -26.3% | |
| EBIT margin | 5.1% |
P&L walk
Consolidated revenue increased 20.4% YoY to ₹2,584.48 million, but gross margin fell to 28.3% from 26.1%? No: material costs rose to 84.3% of revenue from 72.2%, EBITDA margin consequently fell to 5.1% from 11.3%, and PAT declined 49.1% to ₹65.01 million despite higher other income and exceptional income.
Segments
Engineering Products remained the profit engine with ₹2,348.50 million revenue and ₹276.61 million segment result, while EMS generated ₹220.56 million revenue but a ₹84.83 million loss; CTC/PICC/EPICC turned profitable at ₹12.84 million from a ₹4.19 million sequential loss.
Key positives
- Consolidated revenue rose 20.4% YoY to ₹2,584.48 million despite a 7.6% sequential decline.
- Engineering Products generated ₹276.61 million segment profit on ₹2,348.50 million revenue, remaining the primary earnings contributor.
- CTC/PICC/EPICC turned profitable at ₹12.84 million from a ₹4.19 million sequential loss.
- Standalone PAT increased 17.8% YoY to ₹150.91 million, indicating the parent business remained profitable despite group-level subsidiary drag.
Key concerns
- Consolidated EBITDA margin compressed 617bps YoY to 5.1% as materials consumed increased 40.7% YoY versus 20.4% revenue growth.
- Employee costs rose 115.6% YoY to ₹408.00 million, substantially faster than consolidated revenue.
- EMS remained loss-making at ₹84.83 million despite revenue of ₹220.56 million, absorbing a significant portion of Engineering Products' profit.
- Finance costs rose 30.7% YoY to ₹47.36 million, faster than revenue growth.
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