ION Exchange Q2 FY27 Results (NSE: IONEXCHANG)
Signal: Slipped to loss
The read
The trajectory worsened in Q2FY27: standalone revenue fell 9.2% YoY, gross margin compressed 1,011bps to 20.5%, and PAT swung to a 7,135 lakh loss; the immediate thesis issue is cost absorption and subsidiary/legacy-project drag rather than demand growth, while higher PPE plus CWIP and depreciation suggest capacity is being added before margins recover.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹615.73 Cr | -9.2% | -3.1% |
| Net profit | ₹-71.35 Cr | -249.0% | |
| EPS | ₹-5.8 | -249.0% |
P&L walk
The supplied filing text confirms consolidated results were approved but does not include the consolidated P&L table; disclosed subsidiary data shows a material drag, including 1,379.98 lakh of aggregate quarterly losses from three reviewed and twelve unreviewed subsidiaries.
Segments
No segment table was supplied; subsidiaries were a material consolidated drag, with three reviewed subsidiaries reporting 986.80 lakh of quarterly losses and twelve unreviewed subsidiaries reporting another 393.18 lakh of losses.
Key positives
- H1 operating cash flow was positive at 4,044 lakh versus an outflow of 1,427 lakh in H1FY26, despite a reported H1 loss before tax of 8,082 lakh.
- PPE plus CWIP increased to 80,827 lakh from 75,976 lakh at March 2026, while H1 capex was 4,779 lakh, supporting the possibility of future capacity contribution if utilisation improves.
- EPS tracked PAT from 3.894 INR to -5.804 INR, with no evidence in the filing of dilution driving the decline.
Key concerns
- Gross margin fell 1,011bps YoY to 20.5% as materials, purchases and inventory-related costs rose to 79.5% of revenue from 69.4%, and the filing does not disclose a corrective driver.
- Standalone revenue declined 9.2% YoY to 61,573 lakh while employee and other expenses rose 13.0% in aggregate, indicating negative fixed-cost absorption.
- Finance costs rose 294.9% YoY to 857 lakh and net debt increased 5,530 lakh to 29,840 lakh by 30 September 2026.
- The consolidated group includes subsidiary losses of 1,379.98 lakh for the quarter across the three reviewed and twelve unreviewed subsidiaries disclosed in the auditor's report.
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