Rajapalayam Mill Q1 FY27 Results (NSE: RAJPALAYAM)
Signal: Margin expansion
The read
The operating inflection continued: revenue grew 38.5% YoY, raw-material intensity fell 1,316bps and the derived operating margin expanded 233bps, while employee costs grew only 11.7%, depreciation 0.4% and finance costs declined 11.3%; however, consolidated PAT of ₹1,755.27 lakh was still predominantly associate-derived, and associate profit fell 19.3% YoY, so the group earnings trajectory is stronger than the parent but not yet broad-based.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹261.28 Cr | +38.5% | -3.0% |
| Net profit | ₹17.55 Cr | +116.3% | |
| EPS | ₹19.07 | +115.9% | |
| EBIT margin | 16.4% |
P&L walk
Revenue from operations rose 38.5% YoY to ₹26,127.64 lakh, raw-material intensity fell to 43.1% from 56.2%, and the derived operating margin expanded to 16.4% from 14.0%; however, PAT of ₹1,755.27 lakh included ₹1,643.68 lakh from associates, which fell 19.3% YoY.
Segments
No segment table is disclosed because captive wind power is now treated as part of the textile business; the material consolidated-versus-standalone divergence is that associates contributed ₹1,643.68 lakh, or 93.6% of consolidated PAT, versus standalone PAT of ₹111.59 lakh.
Key positives
- Revenue from operations was ₹26,127.64 lakh, up 38.5% YoY, following +21.2% YoY in Q4FY26 and +6.1% in Q3FY26.
- Raw-material intensity declined to 43.1% of revenue from 56.2% YoY, a 1,316bps gross-margin tailwind; the filing does not disclose the specific driver.
- Derived EBITDA was ₹4,274.10 lakh, up 61.6% YoY versus revenue growth of 38.5%, with a +23.1pp growth gap and operating-margin expansion of 233bps to 16.4%.
- Employee benefits grew 11.7% YoY, depreciation 0.4% and finance costs declined 11.3%, materially below the 38.5% revenue growth rate.
- Standalone PAT turned positive at ₹111.59 lakh from a ₹1,224.30 lakh loss YoY and a ₹344.22 lakh loss QoQ.
Key concerns
- Consolidated PAT of ₹1,755.27 lakh included ₹1,643.68 lakh from associates, meaning the parent standalone PAT of ₹111.59 lakh contributed only 6.4% of group PAT.
- Associate profit declined 19.3% YoY and 50.3% QoQ, driving the consolidated PAT decline of 40.7% QoQ despite improved standalone operations.
- Revenue declined 3.0% QoQ to ₹26,127.64 lakh, so the margin improvement has not yet translated into sequential top-line momentum.
- Power and fuel expense rose 75.0% YoY to ₹1,758.01 lakh, despite the company treating captive wind power as part of the textile business for internal reporting.
Research and educational content only. Not investment advice.