Munjal Showa Q1 FY27 Results (NSE: MUNJALSHOW)
Signal: Steady quarter
The read
Net profit of ₹11.2 Cr is entirely non-operational – other income dwarfs core earnings. The company's underlying auto ancillary operations are loss-making after depreciation (core operating loss of ~₹0.2 Cr). Revenue growth of 21.5% YoY is decent, but margins are paper-thin. The high dividend yield (3.26%) is sustained by other income, not operations. This is a structural concern: the company relies on cash/investment income to stay profitable.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹347.5 Cr | 21.5% | 0.1% |
| EBIT | ₹12.87 Cr | 30.1% | |
| Net profit | ₹11.23 Cr | 35.6% | |
| EPS | ₹2.81 | 35.7% | |
| EBIT margin | 3.70% |
P&L walk
Revenue grew 21.5% YoY but QoQ flattish; core operating profit (EBIT before other income) is actually negative after depreciation, as other income (₹1,307 lakh) constitutes 101.6% of PBT. Net profit increase of 35.6% YoY is entirely due to other income, not operational improvement.
Key positives
- Revenue grew 21.5% YoY to ₹347.5 Cr, driven by volume recovery in auto component demand.
- Company is debt-free with steady dividend yield of 3.26%.
- EPS up 35.7% YoY to ₹2.81, though entirely from other income.
Key concerns
- Core operating profit (EBIT before other income) is negative after depreciation; entire net profit from other income (101.6% of PBT).
- QoQ revenue growth negligible (+0.1%), indicating sequential stagnation.
- Gross margin compressed 70bps YoY to 21.2%, suggesting input cost pressure or pricing weakness.
- EBITDA margin (incl. other income) plunged 630bps QoQ to 4.3%, as other income normalised.
Earnings quality: includes non-operating other income
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