Sirca Paints Q2 FY27 Results (NSE: SIRCA)
Signal: Margin pressure
The read
Revenue growth remained strong at 22.0% YoY and accelerated to ₹16,019.85 lakh, but Q2FY27 marks a margin inflection lower: EBITDA margin fell about 270bps YoY to 18.2% after the prior margin-expansion streak, as raw-material and trading costs rose to 57.0% of revenue; PAT growth consequently lagged sales growth at 12.3%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹160.2 Cr | +22.0% | +23.2% |
| EBIT | ₹27.57 Cr | +6.8% | |
| Net profit | ₹20.33 Cr | +12.3% | |
| EPS | ₹3.58 | +10.5% | |
| EBIT margin | 18.2% |
P&L walk
Consolidated revenue rose 22.0% YoY to ₹16,019.85 lakh, but gross margin compressed 313bps as material costs increased faster than sales; EBITDA margin fell to 18.2%, while PAT still rose 12.3% to ₹2,032.50 lakh.
Segments
The company remains a single-segment paints business, and consolidated revenue of ₹16,019.85 lakh and PAT of ₹2,032.50 lakh matched standalone results, so the subsidiary did not materially lift or drag group earnings.
Key positives
- Revenue increased 22.0% YoY to ₹16,019.85 lakh and 23.2% QoQ, sustaining double-digit growth despite the margin setback.
- Employee and other operating expenses grew 20.0% YoY versus revenue growth of 22.0%, providing partial cost absorption.
- Operating cash flow rose to ₹1,414.00 lakh in H1FY27 from ₹928.58 lakh, while the balance sheet remained in net cash of ₹4,796.70 lakh.
- Property, plant and equipment increased to ₹6,440.21 lakh from ₹5,599.76 lakh, with depreciation rising 6.6% YoY to ₹278.88 lakh, a clean depreciation-to-capex signal.
Key concerns
- Gross margin compressed 313bps YoY to 43.0% as material, trading and inventory costs increased to 57.0% of revenue from 53.8%; the filing does not disclose the cause or pricing response.
- EBITDA margin declined approximately 270bps YoY to 18.2%, reversing the margin-expansion pattern cited in the prior company context.
- PAT growth of 12.3% lagged revenue growth of 22.0%, indicating that cost inflation absorbed a meaningful portion of operating growth.
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