ISGEC Heavy Q2 FY27 Results (NSE: ISGEC)
Signal: Margin expansion
The read
The operating recovery is real but not yet consolidated: revenue rose 11.3% YoY and EBITDA margin expanded 155bps to 8.0%, while standalone PAT rose 40.0% to ₹11,814 lakh; however, ₹7,178.15 lakh of subsidiary net losses reduced owner PAT to ₹5,641 lakh, making subsidiary profitability the decisive next inflection.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,850.39 Cr | +11.3% | -6.5% |
| EBIT | ₹120.04 Cr | +137.5% | |
| Net profit | ₹56.41 Cr | +25,541% | |
| EPS | ₹7.67 | +25,467% | |
| EBIT margin | 8.0% |
P&L walk
Consolidated revenue increased to ₹185,039 lakh, +11.3% YoY but -6.5% QoQ; EBITDA margin improved to 8.0% from 6.4% as employee and other operating costs grew 7.8% versus revenue growth, but profit attributable to owners was ₹5,641 lakh because subsidiaries reported aggregate net losses of ₹7,178.15 lakh.
Segments
Industrial Projects was the larger growth engine, with revenue up 21.6% YoY to ₹101,475 lakh and segment result up 64.9% to ₹5,807 lakh; Machinery & Equipment also grew 16.5%, while subsidiary losses caused consolidated owner PAT of ₹5,641 lakh to trail standalone PAT of ₹11,814 lakh.
Key positives
- Consolidated revenue reached ₹185,039 lakh, up 11.3% YoY, led by Industrial Projects revenue growth of 21.6% and Machinery & Equipment growth of 16.5%.
- EBITDA margin expanded 155bps YoY to 8.0%; employee plus other expenses grew 7.8%, 3.5 percentage points slower than revenue growth.
- Standalone operating performance was stronger: revenue rose 17.2% to ₹145,658 lakh, EBITDA margin improved 101bps to 8.5%, and PAT increased 40.0% to ₹11,814 lakh.
- H1 operating cash flow improved to ₹28,562 lakh from ₹6,168 lakh, while finance costs declined 12.7% YoY on a consolidated basis.
Key concerns
- Consolidated gross margin compressed 530bps YoY to 34.0% as raw-material cost increased to 26.6% of revenue from 24.5%; the filing does not disclose the cause, indicating cost absorption despite revenue growth.
- Subsidiaries reported aggregate net loss after tax of ₹7,178.15 lakh in the quarter, causing consolidated owner PAT of ₹5,641 lakh to remain 52.3% below standalone PAT of ₹11,814 lakh.
- Consolidated depreciation fell 47.9% YoY to ₹3,665 lakh even as standalone PPE and CWIP increased, requiring monitoring of the timing of asset commissioning and depreciation recognition.
- Industrial Projects segment assets declined to ₹338,662 lakh from ₹347,235 lakh QoQ while its revenue fell 7.4% sequentially, despite 21.6% YoY growth.
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