Kuantum Papers Q1 FY27 Results (NSE: KUANTUM)
Signal: Margin pressure
The read
The quarter shows a negative earnings inflection: revenue accelerated to +36.3% YoY, but raw-material cost rose +71.2% and increased to 42.6% of revenue, compressing gross margin by 870bps; EBITDA margin fell to 14.1%, EBIT declined 5.0%, and PAT fell 48.3%, so growth is currently not converting into profit.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹303.75 Cr | 36.3% | 0.9% |
| EBIT | ₹25.3 Cr | -5.0% | |
| Net profit | ₹6.23 Cr | -48.3% | |
| EPS | ₹0.71 | -48.6% | |
| EBIT margin | 14.1% |
P&L walk
Revenue grew to ₹303.75 crore, +36.3% YoY and +0.9% QoQ, but raw-material cost rose +71.2% YoY to 42.6% of revenue, compressing gross margin to 57.4% from 66.1%; EBITDA grew only +2.7% YoY, EBIT fell 5.0%, and PAT declined 48.3% as operating costs and finance costs absorbed the revenue growth.
Key positives
- Revenue reached ₹303.75 crore, +36.3% YoY, while employee benefits expense rose only 10.0% YoY to ₹25.36 crore and depreciation rose 16.1% to ₹17.65 crore.
- EPS of ₹0.71 tracked PAT decline closely, with EPS down 48.6% versus PAT down 48.3%, leaving no evidence of material equity dilution in the reported figures.
Key concerns
- Raw-material cost rose 71.2% YoY to ₹129.34 crore, increasing from 33.9% to 42.6% of revenue and compressing gross margin by 870bps; the filing does not disclose the cause.
- Revenue growth did not translate into operating profit: EBITDA grew only 2.7% YoY to ₹42.95 crore and EBITDA margin fell to 14.1% from an implied 18.8%.
Earnings quality: includes non-operating other income
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