NELCO Q2 FY27 Results (NSE: NELCO)
Signal: Steady quarter
The read
The operating trajectory has inflected upward after several quarters of margin contraction: consolidated EBITDA margin expanded to 14.88% from 11.38% YoY and EBITDA grew 33.0% on 5.1% revenue growth, but PAT conversion remains constrained by finance cost of 344 lakh, depreciation of 580 lakh and a new debt-funded 19,110 lakh Elveo investment.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹78.14 Cr | +5.1% | -2.4% |
| Net profit | ₹1.73 Cr | +6.8% | |
| EPS | ₹0.76 | +7.0% | |
| EBIT margin | 14.88% |
P&L walk
Revenue rose 5.1% YoY to 7,814 lakh, while EBITDA increased 33.0% to 1,163 lakh and EBITDA margin expanded to 14.88%; PAT grew only 6.8% to 173 lakh as finance cost rose 126.3% and depreciation rose 13.9%.
Segments
The company reports only one segment, Network Systems; the key divergence is between standalone PAT of 347 lakh and consolidated PAT of 173 lakh, indicating that subsidiary, associate, finance-cost and depreciation effects materially drag group earnings.
Key positives
- Consolidated EBITDA increased 33.0% YoY to 1,163 lakh against 5.1% revenue growth, expanding EBITDA margin by 350bps to 14.88%.
- Employee benefits rose only 2.9% YoY to 1,232 lakh while revenue grew 5.1%, supporting the margin recovery.
- H1 operating cash flow improved to 4,881 lakh from 1,113 lakh, with contract liabilities increasing by 3,960 lakh supporting cash generation.
- Standalone EBITDA grew 60.5% YoY to 1,149 lakh and standalone margin expanded 704bps to 21.77%.
Key concerns
- Consolidated PAT grew only 6.8% YoY to 173 lakh despite 33.0% EBITDA growth because finance cost increased 126.3% to 344 lakh and depreciation increased 13.9% to 580 lakh.
- Net debt rose to approximately 22,404 lakh from 3,938 lakh at March 31, 2026 after new long-term borrowings, materially increasing balance-sheet risk.
- Consolidated revenue declined 2.4% sequentially to 7,814 lakh, so the margin recovery is not yet accompanied by accelerating top-line momentum.
- Consolidated PAT of 173 lakh was substantially below standalone PAT of 347 lakh, highlighting weak group-level earnings conversion.
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