Sunflag Iron Q1 FY27 Results (NSE: SUNFLAG)
Signal: Growth decelerated
The read
The key inflection is not the +6.5% revenue growth but the renewed cost squeeze: gross margin contracted 560bps YoY to 37.7% as raw-material intensity rose to 62.3%, leaving EBITDA growth at only +0.8% and EBITDA margin at 12%; lower finance costs helped PAT grow +5.5%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,078.95 Cr | 6.5% | 7.8% |
| EBIT | ₹99.94 Cr | -1.9% | |
| Net profit | ₹66.05 Cr | 5.5% | |
| EPS | ₹3.66 | 5.5% | |
| EBIT margin | 12% |
P&L walk
Revenue increased to ₹1,07,895 lakh, +6.5% YoY and +7.8% QoQ, but EBITDA grew only +0.8% YoY as gross margin compressed to 37.7% from 43.3% on higher raw-material intensity; lower finance costs and tax supported PAT growth of +5.5%.
Segments
The group reports only one operating segment, Iron & Steel Business; consolidated PAT of ₹6,605 lakh exceeded standalone PAT of ₹6,396 lakh by ₹209 lakh, indicating a modest positive subsidiary/JV contribution.
Key positives
- Revenue reached ₹1,07,895 lakh, up +6.5% YoY and +7.8% QoQ, maintaining positive year-on-year momentum.
- Finance costs declined to ₹1,401 lakh, -31.8% YoY and -20.7% QoQ, supporting PBT conversion.
- Consolidated PAT of ₹6,605 lakh grew +5.5% YoY and exceeded standalone PAT by ₹209 lakh, indicating a modest positive group contribution.
- EPS of ₹3.66 grew in line with PAT at +5.5% YoY, and the PAT-to-EPS check was clean.
Key concerns
- Gross margin compressed 560bps YoY to 37.7% as raw-material cost rose to 62.3% of revenue from 56.7%, indicating cost absorption rather than demonstrated pricing protection.
- EBITDA grew only +0.8% YoY versus revenue growth of +6.5%, while employee cost increased +15.8% YoY to ₹4,332 lakh.
- EBIT declined -1.9% YoY to ₹9,994 lakh despite revenue growth, reflecting pressure from raw materials, employee costs and higher depreciation.
Research and educational content only. Not investment advice.