Sangam India Q1 FY27 Results (NSE: SANGAMIND)
Signal: Margin expansion
The read
Revenue grew 8.9% YoY to ₹860 Cr, but OPM expanded 420bps to 13.1% on raw material cost deflation (RM% down ~690bps), driving PAT up 1825% to ₹41 Cr – the 5th consecutive quarter of margin expansion. Growth investments: ₹1,500 Cr capex plan and ₹100 Cr warrant issue to promoters.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹8.6 Cr | 8.9% | -73.4% |
| EBIT | ₹0.87 Cr | 151.2% | |
| Net profit | ₹0.41 Cr | 1825.8% | |
| EPS | ₹8.16 | 1842.9% | |
| EBIT margin | 13.1% |
P&L walk
OPM surged to 13.1% (+420bps YoY) as raw material cost fell sharply to 56.9% of revenue from 63.8% a year ago, more than offsetting higher power & fuel and employee costs. PAT soared to ₹41 Cr from ₹2.1 Cr on a low base, aided by stable finance costs and lower depreciation (useful life revision).
Key positives
- OPM expanded 420bps YoY to 13.1%, 5th straight quarter of margin expansion (from 7% in Q2FY25).
- Raw material cost as % of revenue dropped from 63.8% to 56.9%, a 690bps improvement, boosting gross margin.
- PAT surged 1825% YoY to ₹41 Cr, from a low base of ₹2.1 Cr in Q1FY26, driven by operating leverage.
- Board approved ₹1,500 Cr capex plan (by March 2029) for capacity expansion across spinning, denim, garmenting, recycling – strong growth signal.
- Warrant issue of ₹100 Cr to promoters at ₹555.56/warrant (premium to CMP) reflects management confidence.
Key concerns
- Revenue growth decelerated to 8.9% YoY vs 20.4% in Q4FY26, and declined 2.7% QoQ.
- Power & fuel costs rose 28.9% YoY and as % of revenue increased 160bps, pressuring margins.
- Depreciation comparability affected by revision of useful lives from Q3FY25 – YoY drop of 28.5% may be temporary.
- Exceptional item (sweat equity amortisation) of ₹166 Lakh per quarter is a recurring non-cash charge distorting reported profit.
Research and educational content only. Not investment advice.