Shankesh Jewellers Q2 FY27 Results (NSE: SHANKESH)
Signal: Margin pressure
The read
The key inflection is revenue growth accelerating to 50.2% YoY, but the earnings trajectory is less supportive: gross margin compressed 219bps to 7.5% as raw-material and inventory cost reached 92.5% of sales, while PAT growth of 47.0% translated into only 3.1% EPS growth because of IPO-related dilution; negative H1 operating cash flow of ₹1,319.95 million is the main quality concern.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹556.4 Cr | +50.2% | +31.4% |
| EBIT | ₹36.21 Cr | +11.7% | |
| Net profit | ₹25.52 Cr | +47.0% | |
| EPS | ₹1.97 | +3.1% | |
| EBIT margin | 6.6% |
P&L walk
Standalone revenue increased to ₹5,564.00 million, up 50.2% YoY and 31.4% QoQ, but gross margin fell to 7.5% from 9.7% YoY as raw-material and inventory cost rose to 92.5% of revenue; PAT still rose 47.0% to ₹255.19 million, while EPS increased only 3.1% to ₹1.97 after the IPO.
Key positives
- Revenue increased 50.2% YoY to ₹5,564.00 million and 31.4% QoQ, showing continued sales momentum.
- PAT rose 47.0% YoY to ₹255.19 million despite a 219bps gross-margin compression.
- Finance costs declined 15.5% YoY to ₹21.46 million, supporting profit conversion below the operating line.
- PPE increased to ₹164.26 million from ₹25.31 million at March 31, 2026 while depreciation rose 51.0% YoY to ₹5.06 million, a clean depreciation-to-asset-base signal.
Key concerns
- Gross margin fell 219bps YoY to 7.5% as raw-material and inventory cost rose to 92.5% of revenue from 90.3%, with the filing not disclosing the cause.
- H1 operating cash flow was negative ₹1,319.95 million versus negative ₹81.75 million in H1FY26, driven by working-capital investment.
- PAT grew 47.0% YoY but basic EPS grew only 3.1%, indicating substantial post-IPO dilution.
- Trade receivables stood at ₹2,604.30 million and inventories at ₹3,194.29 million at September 30, 2026, creating a material working-capital burden relative to the ₹5,564.00 million quarterly revenue.
Research and educational content only. Not investment advice.