Timex Group Q1 FY27 Results (NSE: TIMEX)
Signal: Margin expansion
The read
Q1FY27 marks another quarter of >29% revenue growth and >70% PAT growth, with EBITDA margin expanding 230bps YoY to ~15%. However, gross margin compressed ~430bps as input costs normalised off a low Q1FY26 base — the operating leverage in employee costs (down 140bps as % of revenue) and lower finance cost partly offset. No exceptional items this quarter (vs ₹210 lakh in Q4FY26). The core watch business continues to deliver strong momentum, though the QoQ revenue dip (-6.9%) reflects seasonality. The key watchpoint is whether gross margin can stabilise as the cost base resets.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹218.9 Cr | 29.57% | -6.93% |
| EBIT | ₹34.78 Cr | 65.1% | |
| Net profit | ₹25.02 Cr | 70.55% | |
| EPS | ₹2.44 | 83.46% | |
| EBIT margin | 15.05% |
P&L walk
Revenue growth of 29.6% YoY (₹21,890 lakh vs ₹16,894 lakh) driven by volume/mix. Gross margin compressed ~430bps YoY (cost of materials consumed + purchases of stock-in-trade net of inventory change = 66.9% of rev vs 62.6% in Q1FY26) — inventory cost normalization after prior-year low base. Employee cost fell 140bps as % of revenue (7.5% vs 8.9%) — operating leverage on fixed staff. Other expenses flat at 21.3% of rev. EBITDA margin expanded ~230bps YoY to ~15.0% (EBITDA = PBT + interest + D&A – other income = ~3,282 lakh; margin ~15.0%). PAT +70.6% YoY to ₹2,502 lakh (1,467 lakh). EPS ₹2.44 vs ₹1.33 (+83.5%) — slightly ahead of PAT growth (no dilution).
Segments
Single operating segment (watches manufacturing/trading + after-sales). No segment table; all revenue and profit from core watch business.
Key positives
- Revenue grew 29.6% YoY to ₹21,890 lakh, sustaining double-digit growth trajectory.
- PAT up 70.6% YoY to ₹2,502 lakh, outpacing revenue growth on margin expansion.
- EBITDA margin expanded ~230bps YoY to ~15% (calc), driven by employee cost leverage (opex 7.5% of rev vs 8.9% YoY).
- Finance cost fell 14.2% YoY to ₹109 lakh — debt reduction / lower rates.
- No exceptional items this quarter (Q4FY26 had ₹210 lakh labour-code provision).
Key concerns
- Gross margin (implied) compressed ~430bps YoY — cost of materials consumed + purchases net of inventory change rose to 66.9% of rev from 62.6%.
- QoQ revenue declined 6.9% from Q4FY26 peak — seasonal but material sequential drop.
- Other expenses remained flat at 21.3% of rev — no further operating leverage from this line.
- Tax rate 25.9% — normalised; no tax benefit distortion.
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