RSWM Ltd Q2 FY27 Results (NSE: RSWM)
Signal: Margin expansion
The read
The key inflection remains the margin arc: EBITDA margin expanded to 7.6%, up 180bps YoY, after multiple quarters of improvement, but revenue fell 0.8% YoY to ₹1161.24 crore and finance cost rose 5.8%; PAT growth to ₹19.65 crore was also partly constrained by the ₹11.50 crore electricity-duty provision.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,161.24 Cr | -0.8% | +0.9% |
| EBIT | ₹79.88 Cr | +12.9% | |
| Net profit | ₹19.65 Cr | +134.3% | |
| EPS | ₹4.17 | +134.3% | |
| EBIT margin | 7.6% |
P&L walk
Consolidated revenue was ₹1161.24 crore, down 0.8% YoY, while operating margin expanded to 7.6% from 5.8%; PAT reached ₹19.65 crore despite an ₹11.50 crore exceptional provision related to the electricity-duty dispute.
Segments
Yarn remained the principal earnings driver with ₹1147.39 crore of revenue and ₹83.46 crore of segment result, while Fabric contributed ₹13.85 crore of revenue and ₹5.25 crore of result; the newer rPET and garment businesses were not yet material to consolidated earnings.
Key positives
- EBITDA margin expanded 180bps YoY to 7.6% despite revenue declining 0.8% YoY to ₹1161.24 crore, extending the recent margin-recovery trend.
- PAT increased 134.3% YoY to ₹19.65 crore and EPS rose 134.3% to ₹4.17, with EPS tracking PAT.
- Yarn generated ₹83.46 crore of segment result on ₹1147.39 crore of revenue and remained the dominant earnings contributor.
- The company revised the proposed denim project to ₹208.26 crore by adding a knit-garment facility in the first phase, targeting scale economies.
Key concerns
- Revenue declined 0.8% YoY to ₹1161.24 crore, continuing the subdued topline trend visible in recent quarters.
- Finance cost increased 5.8% YoY to ₹32.59 crore, outpacing revenue growth and limiting below-operating-profit conversion.
- The ₹11.50 crore exceptional provision for the electricity-duty dispute reduced reported PBT and makes the quarter less clean than the PAT growth suggests.
- The proposed garment project cost increased from approximately ₹186.30 crore to ₹208.26 crore, raising execution and funding requirements.
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