Mangalam Organic Q1 FY26 Results (NSE: MANORG)
Signal: Margin pressure
The read
Q1FY26 is a deceleration quarter after a strong margin trajectory in FY24-25. Revenue growth of 22.2% YoY is solid but the gross margin story reversed sharply: raw material cost jumped 1289bps as % of revenue, driving EBIT margin down 528bps YoY — a significant headwind after several quarters of expanding margins. PAT dropped 40.6% YoY as a ₹4.04 Cr other-income cushion also vanished. Operating leverage is absent; the company absorbed input cost pressure without pricing power. The standalone-vs-consolidated gap remains modest (consolidated PAT ₹7.27 Cr vs standalone ₹5.32 Cr), indicating subsidiaries are mildly profitable.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1.79 Cr | 22.2% | 16.6% |
| EBIT | ₹0.09 Cr | -40.8% | |
| Net profit | ₹0.07 Cr | -40.6% | |
| EPS | ₹8.49 | -40.6% | |
| EBIT margin | 4.86% |
P&L walk
Revenue grew 22.2% YoY driven by volume/mix gains, but EBITDA margin collapsed as cost of materials consumed surged 50.5% YoY (to 68.6% of rev from 55.7%), while other income swung from ₹4.04 Cr gain to ₹0.08 Cr — combined to push PAT down 40.6% YoY despite lower tax.
Key positives
- Revenue up 22.2% YoY to ₹179.09 Cr — growth momentum intact.
- Other expenses grew slower than revenue (16.4% vs 22.2%) — some overhead control.
- QoQ PAT improvement of 29.4% from Q4FY26 despite lower other income.
- No exceptional items in current quarter.
- Auditors issued unmodified review opinion on both standalone and consolidated results.
Key concerns
- Gross margin crushed: raw material cost jumped to 68.6% of revenue from 55.7% a year ago — a 1289bps headwind, driver not disclosed but suggests input inflation without pass-through.
- Operating margin (EBIT/revenue) fell to 4.86% from 10.02% — a 528bps YoY compression.
- Other income collapsed to ₹0.08 Cr from ₹4.04 Cr, removing a large profit contributor.
- PAT fell 40.6% YoY to ₹7.27 Cr despite revenue growth — classic profitless growth signal.
- Finance cost grew 29.3% YoY, outpacing revenue growth — debt burden increasing.
- EPS down 40.6% YoY — earnings power sharply lower.
Research and educational content only. Not investment advice.