Varmora Granito H1FY27 Results (NSE: VARMORA)

19 Oct 2026 · Analysis by Alpha Inflection

Signal: Margin expansion

The read

The trajectory improved materially in Q2: revenue from operations rose 27% QoQ to ₹3,990 million and EBITDA margin reached 17.0% versus 10.3% in Q1, reversing the gas-disruption shock; however, H1 gross margin still declined 50bps to 37.2% and net working capital widened to 114 days, so the durability of recovery depends on sustained price pass-through and cash conversion.

P&L walk

H1 revenue from operations grew 3.3% to ₹7,142 million despite Q1 disruption, while EBITDA rose 17% to ₹1,013 million and margin expanded 206bps to 14.0%; PAT increased 498% to ₹537 million, aided by the Q2 recovery and firm price increases.

Key positives

• Q2 revenue from operations grew 9% YoY and 27% QoQ to ₹3,990 million after Q1 disruption, while Q2 EBITDA rose 19% YoY to ₹683 million and margin reached 17.0%.
• Price increases of 18%-19% recovered 100% of the higher gas cost, with Q2 average gas cost easing to ₹80.53 per SCM from ₹84.73 per SCM in Q1.
• Premium GVT and Technical Products contribution increased to 87% of H1 revenue from 83% in H1 FY26, with the category growing 9% YoY.
• Domestic revenue grew 9% YoY to ₹5,897 million and the company added 4 EBOs, taking the network to 309.

Key concerns

• Export revenue declined 18% YoY to ₹1,245 million as Morbi exports were affected by the West Asia conflict and higher Gulf freight costs.
• H1 gross margin compressed 50bps YoY to 37.2%, showing that higher power and fuel costs were not fully neutral at the gross-profit level despite management's stated price pass-through.
• Net working capital rose to 114 days from 96 days in FY26, creating a cash-conversion risk despite the improvement in reported PAT.
• Q1 volumes declined 16% YoY and the recovery depends on gas prices, plant normalisation and sustained pricing.

View original filing

Research and educational content only. Not investment advice.