KSH International Q1 FY27 Results (NSE: KSHINTL)
Signal: Steady quarter
The read
Revenue more than doubled, but gross margin collapsed to 3.1% from 8.8%, driven by a surge in raw material costs. Operating leverage preserved EBITDA margin at 7.1% (+64bps QoQ). PAT growth of 86% is impressive but EPS dilution is material. The post-quarter commencement of captive copper rod production is a potential margin inflection point.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,164.23 Cr | +108% | +14% |
| EBIT | ₹74.18 Cr | +82% | |
| Net profit | ₹42.22 Cr | +86% | +22% |
| EPS | ₹6.23 | +56% | |
| EBIT margin | 7.1% |
P&L walk
Revenue more than doubled (+108% YoY) on volume growth, but gross margin crashed 570bps to 3.1% as raw material cost surged to 96.9% of sales. Operating leverage from employee/other expenses (up only 69% YoY) contained the EBITDA margin decline to 80bps; QoQ EBITDA margin expanded 64bps. PAT growth (+86%) lagged operating profit growth due to steep rise in interest and depreciation; EPS grew only 56% due to IPO dilution.
Key positives
- Revenue surged 108% YoY to ₹1,164.2 Cr, far outpacing cost growth, indicating strong demand and market share gains.
- Operating leverage was strong: EBITDA grew 87% vs revenue growth of 108%, and EBITDA margin expanded 64bps QoQ despite gross margin pressure.
- Employee and other expenses as a % of revenue contracted by 80bps YoY, demonstrating fixed-cost absorption.
- Captive upcast copper rod facility commenced production in Aug 2026, which can significantly reduce raw material costs and improve gross margin in coming quarters.
- Tax rate declined 660bps YoY, boosting PAT.
Key concerns
- Gross margin compressed 570bps YoY to 3.1% as raw material cost soared to 96.9% of revenue, indicating severe input cost pressure or adverse product mix.
- Finance costs jumped 136% YoY, reflecting rising debt; interest coverage remains adequate but trend bears watching.
- EPS grew only 56% vs PAT growth of 86%, highlighting dilution from the IPO and reducing per-share accretion.
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