Shankar Lal Ram. Q1 FY27 Results (NSE: SRD)
Signal: Margin expansion
The read
The main inflection is operating margin: EBITDA margin expanded to 9.4% from approximately 5.1% a year earlier while revenue grew 10.9% YoY, supported by employee costs declining 20.1% and other expenses growing only 11.1%; however, revenue declined 2.7% QoQ and the filing discloses no volume, realisation or inventory-balance data to establish durability.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹135.55 Cr | 10.9% | -2.7% |
| EBIT | ₹12.69 Cr | 106.0% | |
| Net profit | ₹9.19 Cr | 116.7% | |
| EPS | ₹1.44 | 118.2% | |
| EBIT margin | 9.4% |
P&L walk
Revenue of ₹13,555.44 lakh grew 10.9% YoY but declined 2.7% QoQ, while EBITDA of ₹1,272.36 lakh increased 105.5% YoY and EBITDA margin expanded to 9.4% from approximately 5.1% in Q1FY26; lower employee, finance and other expenses supported the operating improvement.
Key positives
- EBITDA reached ₹1,272.36 lakh, up 105.5% YoY versus revenue growth of 10.9%, with EBITDA margin expanding 430bps to 9.4%.
- Employee benefits expense fell 20.1% YoY to ₹61.01 lakh, while other expenses rose only 11.1% YoY to ₹51.72 lakh.
- PAT increased 116.7% YoY to ₹918.51 lakh and EPS rose 118.2% to ₹1.44, with other income of only ₹0.35 lakh, indicating that the profit improvement was operational rather than treasury-income led.
- Finance cost declined 22.3% YoY to ₹37.90 lakh, supporting the EBIT-to-PAT conversion.
Key concerns
- Revenue declined 2.7% QoQ to ₹13,555.44 lakh, so the sharp margin expansion was not accompanied by sequential top-line momentum.
- The company disclosed no volume or realisation data, leaving the sustainability of the improved trading spread unverified.
- The current tax charge rose to ₹306.51 lakh from ₹143.02 lakh in Q1FY26, limiting the conversion of the 106.0% EBIT growth into PAT growth.
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