Mahindra EPC Q2 FY27 Results (NSE: MAHEPC)
Signal: Margin expansion
The read
The key inflection is the Q2FY27 recovery from the Q1FY27 loss: revenue rose 46.5% YoY to ₹72.65 Cr and EBITDA margin recovered to 6.37% from 2.72%, but gross margin contracted 810bps to 48.4% as material intensity rose to 55.2%; with H1 PAT only ₹0.09 Cr versus ₹1.41 Cr, the recovery still needs a second-quarter confirmation without input-cost pressure.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹72.65 Cr | +46.5% | +34.2% |
| EBIT | ₹3.88 Cr | +592.9% | |
| Net profit | ₹2.23 Cr | +418.6% | |
| EPS | ₹0.8 | +433.3% | |
| EBIT margin | 6.37% |
P&L walk
Revenue rose 46.5% YoY to ₹72.65 Cr and EBITDA margin expanded to 6.37% from 2.72%, but gross margin compressed to 48.4% from 56.5% as material costs rose to 55.2% of revenue from 43.5%; lower other income and higher finance costs partly limited PAT conversion to ₹2.23 Cr.
Key positives
- Revenue increased 46.5% YoY to ₹72.65 Cr and 34.2% QoQ, reversing the Q1FY27 decline of 12.7% YoY.
- EBITDA margin expanded 365bps YoY to 6.37% as employee costs rose only 7.2% versus revenue growth of 46.5%.
- PAT recovered to ₹2.23 Cr from ₹0.43 Cr YoY and the ₹2.14 Cr Q1FY27 loss.
- H1 operating cash flow improved to ₹5.17 Cr from a ₹10.34 Cr outflow in H1FY26, while net debt declined to ₹40.59 Cr from ₹43.61 Cr at FY26-end.
Key concerns
- Gross margin compressed 810bps YoY to 48.4% as material-related costs reached 51.6% of revenue and cost of materials consumed rose to 55.2% of revenue from 43.5%.
- Revenue grew 46.5% YoY while cost of materials consumed rose 86.0%, indicating insufficient cost pass-through and cost absorption in the quarter.
- H1 PAT was only ₹0.09 Cr versus ₹1.41 Cr in H1FY26 despite Q2 PAT of ₹2.23 Cr, leaving the earnings recovery dependent on sustained Q2-level execution.
- Inventory increased 34.0% to ₹49.21 Cr from ₹36.73 Cr at FY26-end, while finance costs rose 52.5% YoY to ₹1.22 Cr.
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