UFO Moviez Q1 FY26 Results (NSE: UFO)
Signal: Margin pressure
The read
Consolidated Q1FY26 shows a tepid start: revenue barely grew (+3.8% YoY) and EBITDA margin contracted 182bps to 17% — the second consecutive quarter of margin contraction after a string of expansions — as employee costs and other expenses outpaced revenue. PAT fell 13.5% YoY to ₹5.64 Cr. Standalone, however, performed better (+12.7% revenue, margin expansion to 18.2%), highlighting that the drag came from subsidiaries/associates (one subsidiary contributed ₹1,088 lakh revenue with only ₹13 lakh profit). The ICRA outlook upgrade to Positive is not yet visible in operating metrics. Key positive: net profit sequentially improved (+25.9% QoQ). Key concern: the consolidation drag needs to narrow for group earnings to inflect.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹110.69 Cr | 3.8% | -16.9% |
| EBIT | ₹7.56 Cr | -12.0% | |
| Net profit | ₹5.64 Cr | -13.5% | |
| EPS | ₹1.45 | -13.7% | |
| EBIT margin | 17.0% |
P&L walk
Revenue grew modestly (+3.8% YoY) but OPM contracted 182bps to 17.0% as total expenses grew faster (+3.6% YoY), driven by higher purchases of digital cinema equipment (+₹2,252 lakh vs ₹2,252 lakh in Q1FY25? — check: Q1FY25 purchase was ₹2,252 lakh, Q1FY26 is ₹1,780 lakh, actually lower; but other direct costs rose, employee costs +5.4% YoY, and other expenses +6.9% YoY. PAT fell 13.5% YoY to ₹5.64 Cr, dragged by lower other income and higher tax.
Segments
The company operates as a single segment; the consolidated results reflect the combined performance of the parent and its subsidiaries/associates, with no segment-level divergence.
Key positives
- Standalone revenue grew 12.7% YoY to ₹91.96 Cr, and standalone PAT rose 12.3% YoY to ₹4.10 Cr, indicating healthy core business momentum.
- Sequentially, consolidated PAT improved 25.9% QoQ from ₹4.48 Cr in Q4FY26 to ₹5.64 Cr, driven by higher other income and lower employee costs vs the March quarter.
Key concerns
- Consolidated EBITDA margin contracted 182bps YoY to 17.0%, the second straight quarter of contraction (Q4FY26: 12.95% margin, also contracting YoY), as employee costs (+5.4% YoY) and other expenses (+6.9% YoY) grew faster than revenue (+3.8% YoY).
- Consolidated PAT declined 13.5% YoY to ₹5.64 Cr, with operating profit (EBIT) down 12% YoY; other income also fell 26.9% YoY to ₹3.60 Cr.
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