Nandan Denim Q1 FY27 Results (NSE: NDL)
Signal: Revenue declined
The read
The key inflection is gross margin expanding to 16.59%, up 677bps YoY as raw-material intensity fell to 83.46% of revenue from 89.35%, but this has not translated into operating recovery because revenue remains down 40.59% and employee plus other expenses rose 11.94%; the 32.12% PAT growth is tax-led and therefore low quality.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹622.39 Cr | -40.59% | +15.26% |
| Net profit | ₹14.8 Cr | +32.12% | |
| EPS | ₹0.1 | +25.00% |
P&L walk
Revenue of ₹62,238.91 lakh fell 40.59% YoY despite a 677bps gross-margin expansion, while employee and other operating expenses rose 11.94% and PBT fell 30.40%; PAT rose 32.12% only because tax expense became a ₹448.10 lakh credit.
Key positives
- Gross margin expanded to 16.59%, up 677bps YoY, while raw-material consumption declined to 83.46% of revenue from 89.35%; the filing does not disclose the reason for the improvement.
- Finance costs fell 35.34% YoY to ₹486.09 lakh, supporting PBT despite the 40.59% revenue decline.
- The company acquired a 6.1% stake in Opera Vayu (Narmada) Private Limited for ₹4,00,20,960 to secure wind and solar power under the captive renewable-power route.
Key concerns
- Revenue fell 40.59% YoY to ₹62,238.91 lakh, and the filing provides no volume or realisation data to establish a demand or pricing recovery.
- Employee plus other expenses rose 11.94% YoY to ₹7,886.55 lakh despite the revenue contraction, preventing gross-margin expansion from reaching PBT.
- PBT declined 30.40% YoY to ₹1,031.51 lakh; reported PAT growth of 32.12% to ₹1,479.61 lakh depended on a ₹448.10 lakh net tax credit.
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