Sanstar Q1 FY27 Results (NSE: SANSTAR)
Signal: Loss reversed
The read
Q1FY27 marks a material operating recovery from Q1FY26's ₹0.33 Cr loss and -0.5% EBITDA margin: revenue rose 21.5% YoY, gross margin expanded 910bps to 33.4% and EBITDA margin reached 8.8%, but the 55.1% QoQ PAT decline shows that the recovery remains vulnerable to energy costs and native-starch pricing; the key next test is utilization of the expanded 2,350 TPD base and conversion toward value-added derivatives.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹206.16 Cr | 21.5% | -4.9% |
| EBIT | ₹12.89 Cr | Turnaround from -0.13 Cr | |
| Net profit | ₹9.21 Cr | Turnaround from -0.33 Cr | |
| EPS | ₹0.5 | Turnaround from -0.02 | |
| EBIT margin | 8.8% |
P&L walk
Revenue grew 21.5% YoY to ₹206.16 Cr on normalized plant operations and higher production, gross margin expanded 910bps to 33.4%, and EBITDA margin recovered 930bps to 8.8%, but sequential EBITDA fell 20.5% and PAT fell 55.1% as energy costs and competitive pricing weighed on profitability.
Key positives
- Revenue reached ₹206.16 Cr, up 21.5% YoY, with export revenue growing faster at 24.5% to ₹723 million.
- Gross margin expanded 910bps YoY to 33.4%, while EBITDA margin recovered 930bps from -0.5% to 8.8%.
- Dhule capacity was expanded by 1,250 TPD versus the originally planned 1,000 TPD, taking total installed capacity to 2,350 TPD from 1,100 TPD.
- The ₹1,983 million Ingredion-linked preferential issue provides capital and access to global R&D, technical expertise and formulation capabilities.
- The 3 MW Kutch solar plant is expected to cover around 40% of the facility's electricity requirement and save approximately ₹3 Cr annually.
Key concerns
- PAT declined 55.1% QoQ to ₹9.21 Cr despite revenue remaining at ₹206.16 Cr, indicating weak sequential conversion from revenue to profit.
- Management stated that the Middle East conflict increased energy costs and impacted margins, while native-starch pricing remains competitive.
- The benefits of the expanded 2,350 TPD capacity depend on utilization ramp-up and successful commissioning of the derivatives facility during FY2026-27.
Earnings quality: includes non-operating other income
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