Thirumalai Chem. Q2 FY27 Results (NSE: TIRUMALCHM)
Signal: Loss widened
The read
The operating inflection is material: consolidated revenue rose 28.3% YoY and EBITDA margin recovered to 12.7% from a loss-making base, but this is not yet an earnings inflection because the group still lost ₹3,431 lakh, generated negative H1 operating cash flow of ₹26,845 lakh and carried ₹77,269 lakh of net current liabilities while seeking US$130-180 million of project funding.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹546.67 Cr | +28.3% | +22.7% |
| EBIT | ₹-19.4 Cr | N/A | |
| Net profit | ₹-34.31 Cr | N/A | |
| EPS | ₹-2.85 | +1.4% | |
| EBIT margin | 12.7% |
P&L walk
Consolidated revenue increased to ₹54,667 lakh, +28.3% YoY and +22.7% QoQ, while gross margin expanded to 21.8% from 9.6% YoY and EBITDA margin recovered to 12.7%; finance cost of ₹2,299 lakh and depreciation of ₹8,867 lakh still left the group with a ₹3,431 lakh loss.
Segments
The group has only one reportable segment, organic chemicals; the principal divergence is between standalone loss of ₹1,591 lakh and consolidated loss of ₹3,431 lakh, with the subsidiary/project structure adding ₹1,840 lakh of loss.
Key positives
- Consolidated revenue reached ₹54,667 lakh, +28.3% YoY and +22.7% QoQ, reversing the prior quarter's ₹44,537 lakh base.
- Gross margin expanded to 21.8% from 9.6% YoY as raw-material cost declined to 78.2% of revenue from 90.4%.
- EBITDA recovered to ₹6,927 lakh and EBITDA margin reached 12.7%, a sharp improvement from the prior loss-making operating base.
- CWIP increased to ₹2,85,283 lakh from ₹2,51,843 lakh, indicating continued progress on the US manufacturing project.
Key concerns
- The consolidated group still reported a ₹3,431 lakh loss despite ₹6,927 lakh EBITDA, with ₹8,867 lakh depreciation and ₹2,299 lakh finance cost absorbing operating earnings.
- H1 operating cash flow was negative ₹26,845 lakh versus ₹11,747 lakh inflow in H1FY26, indicating that reported operating recovery has not converted into cash.
- Consolidated current liabilities exceeded current assets by ₹77,269 lakh, including ₹20,169 lakh of short-term working-capital and cash-credit facilities.
- Funding execution remains central: management is still evaluating term sheets for USD 130-180 million of debt financing for TCL Specialties LLC.
- Standalone and consolidated losses diverged by ₹1,840 lakh, confirming that subsidiaries and group financing are materially dragging shareholder earnings.
Research and educational content only. Not investment advice.