Vimta Labs Q1 FY27 Results (NSE: VIMTALABS)
Signal: Growth decelerated
The read
Revenue growth decelerated to 11.8% YoY (₹109.1 Cr) in Q1FY27 from the 20%+ pace seen in H2FY26, and gross margin compressed 150bps YoY as input costs rose 20.5% outpacing revenue — this ends a multi-quarter margin-expansion narrative and signals input-cost pressure may persist. EBITDA margin contracted 33bps YoY to 34.2% despite employee cost leverage, shifting the thesis from margin expansion to protecting the base.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹109.07 Cr | 11.8% | -0.2% |
| EBIT | ₹28.58 Cr | 11.7% | |
| Net profit | ₹21.04 Cr | 11.4% | |
| EPS | ₹4.71 | 10.8% | |
| EBIT margin | 34.2% |
P&L walk
Revenue grew 11.8% YoY but decelerated sharply from the 20%+ run-rate, while gross margin compressed 150bps YoY as material and testing costs rose faster than revenue; employee cost leverage (+5.8% YoY vs revenue +11.8%) and lower ESOP charges provided some offset, but EBITDA margin still contracted 33bps YoY to 34.2%.
Key positives
- Employee cost leverage — employee expenses grew only 5.8% YoY vs revenue growth of 11.8%, with ESOP charge dropping 44% YoY.
- Other income more than doubled to ₹38.12 million (vs ₹17.49 million YoY), providing a tailwind to PBT.
- Finance costs fell another 24.8% YoY, reflecting a net-debt-free balance sheet.
- New ESOP grant of 40,500 options signals retention focus, though charge remains controlled.
Key concerns
- Gross margin contracted 150bps YoY to 79.2% — first significant headwind after several quarters of OPM expansion; material & testing costs rose to 20.8% of revenue vs 19.3% a year ago, outpacing revenue growth.
- Revenue growth decelerated to 11.8% YoY, well below the 20-25% CAGR targeted by management and the 20%+ pace in H2FY26.
- EBITDA margin shrank 33bps YoY to 34.2% despite operating leverage, breaking a streak of margin expansion; QoQ drop of 184bps is notable.
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