Himadri Special Q2 FY27 Results (NSE: HSCL)
Signal: Margin pressure
The read
The trajectory has shifted from rapid margin expansion to a volume-or-revenue-led growth phase: revenue growth accelerated to +57.9% YoY from +28.1% in Q1FY27, but operating margin contracted 428bps YoY to 17.93%, marking the third consecutive quarter of YoY margin contraction; PAT still grew 31.3% to ₹231.32 crore, supported by scale but pressured by direct costs and higher finance costs.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,691.43 Cr | +57.9% | +18.1% |
| Net profit | ₹231.32 Cr | +31.3% | |
| EPS | ₹4.6 | +28.5% | |
| EBIT margin | 17.93% |
P&L walk
Revenue accelerated to ₹1,691.43 crore, +57.9% YoY and +18.1% QoQ, but operating margin fell to 17.93% from 22.21% as direct-cost intensity and operating expenses increased; PAT still rose 31.3% to ₹231.32 crore, helped by higher operating profit rather than exceptional items.
Segments
Carbon materials and chemicals drove the group with ₹1,539.02 crore revenue and ₹251.64 crore segment profit, while Power added ₹33.32 crore revenue and ₹29.84 crore profit; Others generated ₹144.14 crore revenue but only ₹0.05 crore profit and therefore dragged segment quality.
Key positives
- Revenue from operations reached ₹1,691.43 crore, +57.9% YoY and +18.1% QoQ, accelerating from +28.1% YoY in Q1FY27.
- Carbon materials and chemicals contributed ₹251.64 crore of segment profit on ₹1,539.02 crore revenue, while Power delivered ₹29.84 crore profit on ₹33.32 crore revenue.
- PAT increased 31.3% YoY to ₹231.32 crore and EPS rose 28.5% to ₹4.60, with EPS broadly tracking PAT.
- Employee and other operating expenses of ₹205.46 crore grew 16.7% YoY, materially below revenue growth, providing partial cost absorption.
Key concerns
- Operating margin fell 428bps YoY to 17.93% from 22.21%, extending the company’s margin contraction streak to three quarters.
- Gross margin declined to 30.77% from 38.19% as direct-cost intensity increased; the filing does not disclose whether the pressure was input-cost, pricing or mix-led.
- Finance costs increased 87.5% YoY to ₹27.72 crore, materially faster than revenue growth.
- H1FY27 operating cash flow was negative at ₹168.75 crore despite ₹607.85 crore pre-tax profit, reflecting cash absorption in inventories and receivables.
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