Linc Q2 FY27 Results (NSE: LINC)
Signal: Margin pressure
The read
Revenue growth reaccelerated to 10.8% YoY from 1.4% in Q1FY27, but the trajectory remains earnings-negative: EBITDA margin fell to 8.14% from 8.70% sequentially and 10.44% YoY as polymer-cost inflation compressed gross margin by 196bps, while PAT fell 38.3% and parent-attributable EPS fell 50.7%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹154.12 Cr | +10.8% | +10.9% |
| EBIT | ₹8.3 Cr | -41.5% | |
| Net profit | ₹5.2 Cr | -38.3% | |
| EPS | ₹0.7 | -50.7% | |
| EBIT margin | 8.14% |
P&L walk
Consolidated revenue increased 10.8% YoY to ₹15,412.46 lakh, but gross margin contracted 196bps to 37.33% and EBITDA margin fell 230bps to 8.14%, driving PAT down 38.3% to ₹520.38 lakh; the ₹101.73 lakh minority-interest charge also widened the gap between group PAT and parent-attributable earnings.
Segments
The group has one reportable segment, Writing Instruments and Stationery; consolidated PAT of ₹520.38 lakh was ₹187.89 lakh above standalone PAT, but the group result was reduced by a ₹101.73 lakh non-controlling-interest allocation and a ₹60.84 lakh joint-venture loss.
Key positives
- Consolidated revenue increased 10.8% YoY to ₹15,412.46 lakh, accelerating from 1.4% YoY growth in Q1FY27.
- PPE increased to ₹9,684.45 lakh and CWIP to ₹5,520.11 lakh, indicating continued investment in the manufacturing footprint.
- Depreciation rose 7.9% in H1FY27 alongside higher PPE and CWIP, providing a clean depreciation-to-capex cross-check.
Key concerns
- Gross margin contracted 196bps YoY to 37.33% as raw-material consumption rose to 24.14% of revenue from 18.87%; polymer-cost pressure was not absorbed through pricing.
- EBITDA margin declined 230bps YoY to 8.14%, with EBITDA falling despite 10.8% revenue growth; the filing provides no evidence of volume-led growth or pricing power.
- Operating cash flow fell to ₹417.10 lakh in H1FY27 from ₹2,624.54 lakh, while inventory rose to ₹14,133.90 lakh and borrowings increased to ₹2,367.01 lakh.
- Standalone PAT fell 67.3% to ₹332.49 lakh, showing that the consolidated result benefits materially from subsidiaries and joint ventures.
- The company has not provided a provision for a disputed GST demand of ₹353.39 lakh plus an equal penalty and applicable interest.
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