NESCO Q1 FY27 Results (NSE: NESCO)
Signal: Margin pressure
The read
Revenue grew 9.6% YoY but PAT growth was only 4% due to OPM contraction of 100bps and a doubling of finance cost. A one-off gain of ₹11.22 Cr from lease surrender boosted net profit, masking underlying weakness in Foods and Realty margins. The sequential OPM recovery from 46% in Q4FY26 is encouraging but still below year-ago levels, and the core business shows mixed trends.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹211.8 Cr | 9.6% | -15.8% |
| EBIT | ₹134.3 Cr | 5.3% | |
| Net profit | ₹99.96 Cr | 4.0% | |
| EPS | ₹14.19 | 4.0% | |
| EBIT margin | 55.7% |
P&L walk
Revenue grew 9.6% YoY but OPM contracted 100bps to 55.7%, mainly due to margin pressure in Foods (9.2% vs 11.7%) and Realty (84.2% vs 85.4%). PAT growth of 4% was supported by a one-off gain of ₹11.22 Cr from lease surrender; without it, PAT would have been flat-to-negative. Finance cost doubled YoY to ₹7.26 Cr, eating into profitability.
Segments
Realty (profit margin 84.2%) remains the cash cow, but revenue flat. BEC and Foods drove revenue growth, but their margins contracted (BEC 49.5% vs 50.8%, Foods 9.2% vs 11.7%). Indabrator turned profitable (₹0.12 Cr vs -₹0.45 Cr). Way-Side Amenities reported a profit of ₹7.62 Cr, entirely due to a one-time gain of ₹11.22 Cr from lease surrender.
Key positives
- Revenue grew 9.6% YoY to ₹211.8 Cr, driven by Foods (+22.7%) and BEC (+10.4%).
- Indabrator segment turned profitable from a loss of ₹0.45 Cr to ₹0.12 Cr.
- Realty segment maintained high margin of 84.2% with stable revenue.
- OPM recovered sharply from 46% in Q4FY26 to 55.7% sequentially.
Key concerns
- PAT growth of only 4% lagged revenue growth, partly due to OPM contraction of 100bps YoY.
- Foods segment margin declined from 11.7% to 9.2%, indicating input cost pressure or competitive pricing.
- Finance cost doubled YoY to ₹7.26 Cr, eroding profitability.
- Cost of materials consumed grew 39.8% YoY, far outpacing revenue growth of 9.6%.
- One-off gain of ₹11.22 Cr from lease surrender inflated profit; excluding it, PAT would have been roughly flat.
Research and educational content only. Not investment advice.