Sumitomo Chemi. Q2 FY27 Results (NSE: SUMICHEM)
Signal: Revenue declined
The read
Q2FY27 marks a clear deceleration after Q1FY27's 0.6% revenue growth and 20.4% PAT growth: consolidated revenue fell 2.4% YoY, gross margin contracted 238bps to 40.7% and EBITDA margin fell 234bps to 25.3%; the next thesis test is whether the margin pressure is transient or the start of a renewed downcycle in agrochemical demand and pricing.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹907.31 Cr | -2.4% | -14.7% |
| Net profit | ₹167.4 Cr | -5.8% | |
| EPS | ₹3.14 | -11.8% | |
| EBIT margin | 25.3% |
P&L walk
Consolidated revenue declined 2.4% YoY and 14.7% QoQ to ₹9073.09 million; gross margin contracted 238bps to 40.7%, driving EBITDA margin down 234bps to 25.3%, while PAT fell 5.8% to ₹1674.04 million despite ₹435.87 million of other income.
Segments
The group is effectively single-segment agro-chemicals; consolidated PAT of ₹1674.04 million was ₹113.62 million above standalone PAT of ₹1560.42 million, so subsidiaries modestly lifted reported profit but did not offset the parent-level slowdown.
Key positives
- H1FY27 operating cash flow increased 2.8% YoY to ₹4468.27 million despite the weaker Q2FY27 profit trend.
- Finance costs declined 13.9% YoY to ₹19.24 million, while consolidated borrowings remained minimal at ₹14.21 million.
- Consolidated PAT of ₹1674.04 million remained above standalone PAT of ₹1560.42 million, indicating a modest positive subsidiary contribution.
Key concerns
- Consolidated revenue declined 2.4% YoY to ₹9073.09 million after Q1FY27's 0.6% growth, with no volume or realisation disclosure to establish the cause.
- Gross margin compressed 238bps YoY to 40.7% as combined materials, purchases and inventory change increased to 59.3% of revenue from 56.9%; driver not disclosed.
- EBITDA margin fell 234bps YoY to 25.3% and PAT declined 5.8% to ₹1674.04 million, showing that cost control did not fully absorb the gross-margin pressure.
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