Tenneco Clean Q1 FY27 Results (NSE: TENNIND)
Signal: Margin pressure
The read
Top-line momentum continued with 20% revenue growth, but margin compression from input-cost headwind (raw material % up 210bps) reversed the FY26 margin improvement trend. EBITDA margin at 16.5% is the lowest in the last four quarters (prior series: Q4FY26 18.3%, Q3FY26 17%, Q2FY26 17%), signaling potential structural cost pressure if raw prices stay elevated. PAT declined YoY for the first time in four quarters. The standalone entity's profit was hit by lower dividend from subsidiaries, but group operations bear watching for volume vs pricing power.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,544.75 Cr | 20.2% | -0.5% |
| EBIT | ₹227.78 Cr | -2.8% | |
| Net profit | ₹165.04 Cr | -1.8% | |
| EPS | ₹4.09 | -1.7% | |
| EBIT margin | 16.5% |
P&L walk
Revenue grew 20.2% YoY to ₹1,544.75 Cr driven by volume and mix; gross margin compressed ~150bps to 34.3% as raw material % rose 210bps to 66.5% (input-cost headwind). EBITDA margin fell 370bps to 16.5% due to the gross margin drag and higher other expenses (+25.7% YoY) partly offset by employee cost efficiency. Finance cost grew in line with revenue; depreciation grew slower. PAT declined 1.8% YoY as operating profit contraction outweighed slightly lower tax rate.
Key positives
- Revenue grew 20.2% YoY to ₹1,544.75 Cr, sustaining double-digit growth trajectory.
- Employee cost grew only 16.1% YoY, below revenue growth, indicating operational discipline.
- No exceptional items or auditor qualifications; audit report clean.
- Order book of INR124 Bn (from recent concall) provides visibility; this quarter's numbers do not reflect order book directly.
Key concerns
- EBITDA margin compressed 370bps YoY to 16.5%, driven by raw material cost increase (raw material % of revenue up 210bps to 66.5%).
- Gross margin fell 150bps YoY despite revenue growth, suggesting pricing power insufficient to pass through input costs.
- PAT declined 1.8% YoY despite 20% revenue growth – operating leverage negative.
- Standalone PAT dropped 19.1% due to lower other income (dividend from subsidiaries).
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