Sh. Rama Multi. Q1 FY27 Results (NSE: SHREERAMA)
Signal: Margin pressure
The read
The quarter shows a sharp revenue acceleration to ₹8,051.97 lakh, +45.48% YoY versus the company's recent 5.58% sales growth reference, but profitability did not scale: gross margin compressed 605bps to 39.69% and EBITDA margin fell 581bps to 17.03%, leaving PAT growth at only 9.72% despite 13.33% PBT growth. The key inflection to monitor is whether the material-cost ratio remains near 60.31% or normalises in subsequent quarters.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹80.52 Cr | +45.48% | +28.91% |
| EBIT | ₹11.42 Cr | +11.19% | |
| Net profit | ₹8.06 Cr | +9.72% | |
| EPS | ₹0.58 | +9.43% | |
| EBIT margin | 17.03% |
P&L walk
Standalone revenue increased to ₹8,051.97 lakh, +45.48% YoY and +28.91% QoQ, but gross margin compressed to 39.69% from 45.74% as raw material and inventory costs rose to 60.31% of revenue; EBITDA margin consequently fell to 17.03% from 22.84%, while PAT still grew 9.72% to ₹806.13 lakh because the operating profit increase offset sharply lower other income.
Key positives
- Revenue from operations reached ₹8,051.97 lakh, +45.48% YoY and +28.91% QoQ, materially above the company's 5.58% sales-growth reference.
- Finance cost declined 37.83% YoY to ₹23.19 lakh, while employee costs rose only 21.06% YoY and fell to 8.57% of revenue from 10.30%.
- PAT increased 9.72% YoY to ₹806.13 lakh even as other income declined 84.54% YoY to ₹23.18 lakh, indicating that reported profit growth was not dependent on treasury income.
Key concerns
- Gross margin compressed 605bps YoY to 39.69% as material and inventory costs rose to 60.31% of revenue from 54.26%; the filing does not disclose whether this was driven by input inflation, pricing or mix.
- EBITDA grew only 8.48% YoY to ₹1,371.31 lakh versus revenue growth of 45.48%, resulting in a 581bps EBITDA-margin decline to 17.03%.
- Depreciation declined 4.31% YoY to ₹229.27 lakh, but the filing provides no fixed-asset or CWIP data to assess the capex and asset-base implications.
Research and educational content only. Not investment advice.