Sirca Paints Q1 FY27 Results (NSE: SIRCA)
Signal: Margin expansion
The read
Q1FY27 marks the 4th consecutive quarter of YoY margin expansion, with OPM rising 220bps to 17.0% — a clear recovery from the margin contraction phase in FY25. Revenue growth of 13.8% YoY, while solid, decelerated from the 44.3% and 24.8% rates seen in the prior two quarters — partially seasonal but still a monitor point. The key driver was a 570bps YoY decline in raw material cost as % of revenue, suggesting input cost relief or favourable mix. EPS growth lagged PAT growth due to equity dilution, a red flag for minority shareholders.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹130.01 Cr | 13.8% | -3.2% |
| EBIT | ₹22.14 Cr | 15.4% | |
| Net profit | ₹16.21 Cr | 14.1% | |
| EPS | ₹2.85 | 10.0% | |
| EBIT margin | 17.0% |
P&L walk
Revenue grew 13.8% YoY to ₹13,000.53 lakh, driven by volume/mix as cost of materials % of revenue fell sharply by 570bps to 45.2%, enabling gross margin expansion. EBITDA margin expanded 220bps YoY to 17.0% (EBITDA = ₹2,213.82 lakh ÷ revenue = 17.0%), the 4th consecutive quarter of YoY margin expansion, recovering from a year of contraction. Employee costs grew 17.8% YoY, slightly outpacing revenue but were well-contained; other expenses grew 11.8% YoY, slower than revenue, providing operating leverage. Depreciation rose 8.7% YoY, broadly in line with asset base. Finance costs fell 23.1% YoY to ₹98.60 lakh. PAT grew 14.1% YoY to ₹1,620.58 lakh, tracking operating profit growth (PBT +15.4%). EPS grew 10.0% YoY to ₹2.85, slightly lagging PAT growth due to equity dilution from 5,48,08,800 to 5,67,92,800 shares.
Segments
The company operates in a single segment: manufacturing and repackaging of wood, wall paints & related products. No segment disclosures presented.
Key positives
- OPM expanded 220bps YoY to 17.0% — 4th consecutive quarter of YoY margin improvement, confirming a sustained recovery.
- Cost of materials % of revenue fell 570bps YoY to 45.2%, the primary driver of margin expansion.
- Finance costs declined 23.1% YoY to ₹98.60 lakh, reflecting lower debt.
- Other expenses as % of revenue fell 140bps YoY, indicating operating leverage.
Key concerns
- Revenue growth of 13.8% YoY is the slowest in four quarters, decelerating from Q4FY26's 32.7% and Q1FY26's 44.3% — partly seasonal but warrants monitoring.
- Employee costs grew 17.8% YoY, outpacing revenue growth, slightly pressuring margins.
- EPS growth of 10.0% lags PAT growth of 14.1% due to equity dilution from increased share count.
Research and educational content only. Not investment advice.