SRM Contractors Q1 FY27 Results (NSE: SRM)
Signal: Margin expansion
The read
The operating inflection is gross-margin-led: consolidated margin expanded 630bps YoY to 39.4% and EBITDA margin rose 580bps to 19.9%, reversing the margin contraction seen in Q1FY26 and Q2FY26; however, depreciation rose 314.9% and finance costs 248.3%, while the parent grew revenue only 5.1% versus 37.8% for the group.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹196.26 Cr | 37.8% | -56.0% |
| EBIT | ₹28.84 Cr | 47.7% | |
| Net profit | ₹19.71 Cr | 54.6% | |
| EPS | ₹8.59 | 54.5% | |
| EBIT margin | 19.9% |
P&L walk
Consolidated revenue rose to ₹19,626.20 lakh, +37.8% YoY, while gross margin expanded to 39.4% from 33.1% and EBITDA grew 77.9% to ₹3,914.00 lakh; higher depreciation of ₹1,029.05 lakh and finance cost of ₹457.06 lakh moderated the conversion to PAT growth of 54.6%.
Segments
The company reports a single segment, but the consolidated-versus-standalone gap is material: consolidated revenue grew 37.8% YoY to ₹19,626.20 lakh versus standalone growth of 5.1% to ₹15,031.54 lakh, while consolidated PAT growth of 54.6% exceeded standalone PAT growth of 22.1%.
Key positives
- Consolidated revenue reached ₹19,626.20 lakh, up 37.8% YoY, accelerating the group’s scale despite a 56.0% QoQ decline from the seasonally larger Q4 base.
- Gross margin expanded 630bps YoY to 39.4% as raw material cost fell to 60.6% of revenue from 66.9%; the filing does not disclose whether this was price, mix or input-cost driven.
- EBITDA grew 77.9% YoY to ₹3,914.00 lakh and EBITDA margin expanded 580bps to 19.9%, materially ahead of revenue growth.
- Consolidated PAT of ₹1,971.25 lakh grew 54.6% YoY and EPS of ₹8.59 grew 54.5%, showing no PAT-to-EPS dilution divergence.
- The group outperformed the parent: consolidated revenue growth was 37.8% versus 5.1% standalone, indicating stronger contribution from subsidiaries and joint ventures.
Key concerns
- Depreciation increased 314.9% YoY to ₹1,029.05 lakh and finance costs increased 248.3% to ₹457.06 lakh, limiting EBITDA-to-PAT conversion.
- Standalone revenue grew only 5.1% YoY to ₹15,031.54 lakh, so the consolidated growth engine is increasingly dependent on subsidiaries and joint ventures.
- Sequentially, consolidated revenue declined 56.0%, PAT declined 63.5% and EPS declined 63.6% from Q4FY26; the filing does not provide a seasonal explanation.
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