Rane (Madras) Q2 FY27 Results (NSE: RML)
Signal: Margin pressure
The read
The operating trajectory weakened despite 34.6% YoY revenue growth: gross margin compressed 480bps to 43.1% and EBITDA margin fell to 12.9%, while reported PAT of ₹326.68 crore was inflated by the ₹339.65 crore land-sale gain; the HCL friction acquisition is now completed but its recurring contribution is not yet separately visible.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,237.14 Cr | +34.6% | +18.8% |
| Net profit | ₹326.68 Cr | +1421.8% | |
| EPS | ₹118.2 | +1421.6% | |
| EBIT margin | 12.9% |
P&L walk
Revenue accelerated to ₹1237.14 crore, +34.6% YoY, but gross margin fell to 43.1% from 47.9% as material costs rose to 58.5% of revenue; PAT of ₹326.68 crore reflects the ₹339.65 crore land-sale gain rather than recurring operating earnings.
Segments
The group remains a single auto-components segment, contributing ₹1237.14 crore of revenue and ₹388.74 crore of segment result; the apparent profit surge is concentrated in the consolidated exceptional gain rather than a separately disclosed operating segment.
Key positives
- Consolidated revenue rose to ₹1237.14 crore, +34.6% YoY and +18.8% QoQ, accelerating from ₹1041.62 crore in Q1FY27.
- H1FY27 revenue reached ₹2278.76 crore, +26.6% YoY, while PPE and CWIP increased to ₹644.48 crore and ₹134.19 crore respectively.
- The HCL friction business acquisition was completed on August 20, 2026 for ₹365.72 crore, expanding the platform, although post-acquisition operating contribution is not separately disclosed.
Key concerns
- Gross margin contracted 480bps YoY to 43.1% as raw-material cost rose to 58.5% of revenue from 56.0%, indicating cost absorption or weaker mix with no driver disclosed.
- EBITDA margin declined 255bps YoY to 12.9% despite revenue growth of 34.6%, so the quarter does not meet the conditions for operating leverage.
- Finance costs rose 43.2% YoY to ₹20.52 crore while borrowings reached ₹1025.45 crore, increasing balance-sheet sensitivity as the acquisition is integrated.
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