Sedemac Mechatro Q1 FY27 Results (NSE: SEDEMAC)
Signal: Margin expansion
The read
Q1FY27 saw robust revenue growth driven by Mobility (53% YoY), a 570bps gross margin expansion from input deflation, and operating leverage (employee cost +22% vs revenue +43%). PAT beat was amplified by a one-time ₹2.98 Cr tax reversal; excluding that, PAT still grew ~75% YoY. Key concern: EPS growth lags PAT due to IPO dilution, and Industrial segment remains a drag.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹309.77 Cr | 42.51% | 7.66% |
| EBIT | ₹43.05 Cr | 35.85% | |
| Net profit | ₹33.31 Cr | 95.14% | |
| EPS | ₹7.54 | 87.56% | |
| EBIT margin | 13.93% |
P&L walk
Revenue grew 42.5% YoY driven by Mobility segment (+53% YoY), while Industrial declined 16% YoY. Gross margin expanded 570bps YoY to 37.18% due to raw material cost % falling from 68.3% to 62.6% – input deflation tailwind. Employee cost grew 22% YoY, slower than revenue, providing operating leverage. EBITDA (calculated) grew 50.6% YoY vs revenue 42.5% YoY (+8.1pp gap), and EBITDA margin expanded from ~16.4% to ~19.1% (~270bps), confirming operating leverage. Depreciation rose 25% YoY, in line with asset base growth (Mobility segment assets up 90% YoY). Finance cost declined 5% YoY due to lower debt. Other income fell 67% YoY to ₹0.86 Cr, but operating strength more than compensated. Tax rate dropped from 43.4% to 19.4% due to reversal of excess tax provision of ₹2.98 Cr (exceptional), boosting PAT. Excluding this reversal, PAT growth would still be strong but lower.
Segments
Mobility segment (91% of revenue) grew 53% YoY to ₹281.04 Cr and segment result rose 46% YoY to ₹39.09 Cr – the primary growth engine. Industrial segment revenue declined 16% YoY to ₹28.73 Cr, with segment result falling 18% YoY to ₹3.96 Cr – a drag.
Key positives
- Revenue growth of 42.5% YoY, driven by Mobility segment up 53% YoY.
- Gross margin expanded 570bps YoY to 37.18% as raw material cost % fell from 68.3% to 62.6%.
- EBITDA grew 50.6% YoY vs revenue 42.5% YoY (+8.1pp gap), with EBITDA margin expanding ~270bps – clear operating leverage.
- PAT grew 95% YoY to ₹33.31 Cr, though note a one-time tax reversal of ₹2.98 Cr.
Key concerns
- Industrial segment revenue declined 16% YoY, continuing its weak trend.
- EPS growth of 88% YoY lags PAT growth of 95% due to IPO dilution (paid-up capital multiplied post-IPO).
- Finance cost jumped 77% QoQ, though still modest at ₹2.32 Cr.
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