Swaraj Engines Q2 FY27 Results (NSE: SWARAJENG)
Signal: Growth reaccelerated
The read
The trajectory improved in Q2: revenue growth accelerated to 26.0% YoY from 21.5% in Q1FY27, engine volumes grew 19.6%, and operating margin recovered to 13.61% from 13.04% sequentially after the prior-quarter 80bps YoY compression; however, gross margin remained 22bps below last year as raw-material intensity increased.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹635.19 Cr | +26.0% | +8.0% |
| EBIT | ₹86.45 Cr | +27.1% | |
| Net profit | ₹60.57 Cr | +21.9% | |
| EPS | ₹49.86 | +22.0% | |
| EBIT margin | 13.61% |
P&L walk
Standalone revenue rose to ₹63519 lakh, +26.0% YoY and +8.0% QoQ, supported by 19.6% volume growth; operating profit increased 27.1% to ₹8645 lakh and margin expanded 11bps YoY to 13.61%, while PAT grew 21.9% to ₹6057 lakh.
Key positives
- Revenue reached ₹63519 lakh, up 26.0% YoY and 8.0% QoQ, with engine volumes up 19.6% to 61216 units; revenue growth exceeded volume growth, indicating higher realisation or mix.
- Operating profit rose 27.1% to ₹8645 lakh versus revenue growth of 26.0%, while operating margin expanded 11bps YoY to 13.61% and 57bps QoQ.
- Employee benefits expense increased 16.9% YoY and depreciation increased 13.1%, both below the 26.0% revenue growth rate, supporting the 11bps margin expansion.
- PAT rose 21.9% to ₹6057 lakh and basic EPS rose 22.0% to ₹49.86 without a change in paid-up equity share capital.
- H1 operating cash flow remained positive at ₹10161 lakh and PPE rose to ₹19964 lakh, indicating ongoing capacity or asset investment.
Key concerns
- Gross margin declined 22bps YoY to 21.42% as raw-material cost increased to 79.17% of revenue from 78.68%, showing that cost inflation was not fully offset at the gross-profit level.
- Trade receivables increased to ₹24908 lakh from ₹20618 lakh at 31 March 2026, while H1 operating cash flow fell to ₹10161 lakh from ₹11296 lakh year-on-year.
- H1 capital expenditure on PPE was ₹6752 lakh versus ₹1377 lakh in the prior-year half-year, requiring conversion of the asset build into future volume and profit growth.
Research and educational content only. Not investment advice.