Sterling Tools Q1 FY27 Results (NSE: STERTOOLS)
Signal: Steady quarter
The read
The operating inflection is positive but incomplete: consolidated revenue returned to ₹21,407.13 lakh, +11.45% YoY after three quarters of YoY decline, and EBITDA margin rebounded to 11.8% from 3.59% in Q4FY26; however, the standalone business generated ₹1,640.25 lakh PAT while subsidiary losses reduced group PAT to ₹585.82 lakh, leaving execution in the e-mobility subsidiaries as the key trajectory variable.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹214.07 Cr | +11.45% | -3.56% |
| EBIT | ₹15.18 Cr | N/A | |
| Net profit | ₹5.86 Cr | -34.83% | |
| EPS | ₹1.61 | -35.08% | |
| EBIT margin | 11.8% |
P&L walk
Consolidated revenue increased to ₹21,407.13 lakh, +11.45% YoY but -3.56% QoQ, gross margin expanded to 61.38% from 45.60% YoY, and EBITDA margin recovered to 11.8% from 3.59% in Q4FY26; however, subsidiary losses drove PAT down to ₹585.82 lakh, -34.83% YoY.
Segments
There is no reportable segment split, but subsidiaries materially drag the group: standalone PAT was ₹1,640.25 lakh versus consolidated PAT of ₹585.82 lakh, with two reviewed subsidiaries reporting ₹923.83 lakh of net losses.
Key positives
- Consolidated revenue reached ₹21,407.13 lakh, +11.45% YoY, reversing the -31.8%, -26.8% and -21.1% YoY declines reported in Q1FY26-Q3FY26.
- Standalone EBITDA margin was 15.6%, up from the prior-year quarter's implied operating margin of 14.1%, while employee and other expenses grew 8.83% versus 23.77% revenue growth, supporting fixed-cost absorption.
- Standalone PAT increased 48.45% YoY to ₹1,640.25 lakh and basic EPS rose 47.87% to ₹4.51.
- Consolidated EBITDA margin recovered to 11.8% from 3.59% in Q4FY26, a sequential improvement of 821bps.
Key concerns
- Consolidated PAT fell 34.83% YoY to ₹585.82 lakh despite 11.45% revenue growth because subsidiaries reported material losses, including ₹923.83 lakh from two reviewed subsidiaries.
- Consolidated revenue of ₹21,407.13 lakh was still 3.56% below Q4FY26, so the recovery has not yet established a sustained sequential growth trend.
- Raw material cost rose to 42.74% of consolidated revenue from 36.90% YoY even as gross margin expanded, indicating that inventory movements and purchase costs materially affected the margin profile; the filing does not explain the driver.
- The company approved up to ₹15 crore investment in wholly owned subsidiary Sterling Tech-Mobility Limited for working capital, despite that subsidiary reporting FY2025-26 revenue of only ₹34.39 lakh.
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