Vardhman Special Q1 FY27 Results (NSE: VSSL)
Signal: Margin expansion
The read
Strong operational performance with EBITDA margin expanding to ~14%, up ~500bps YoY, driven by volume growth, price hikes from OEMs, operating efficiencies, and solar power cost savings, marking a significant inflection from the prior year's weaker margins.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹486.01 Cr | 12.06% | 6.13% |
| EBIT | ₹68.29 Cr | 73.63% | |
| Net profit | ₹41.19 Cr | 107.01% | |
| EPS | ₹4.26 | 75.31% | |
| EBIT margin | 14.05% |
P&L walk
Robust operating performance: revenue grew 12% YoY driven by volume (+6.4%) and better realizations; EBITDA surged 74% YoY as operating efficiencies and solar cost savings boosted margins by ~500bps YoY.
Key positives
- Revenue grew 12% YoY to ₹486 Cr, driven by both volume (+6.4%) and higher realizations.
- EBITDA surged 73.6% YoY to ₹68.3 Cr, with EBITDA/tonne at ₹10,764, improving from year-ago levels.
- PAT more than doubled to ₹41.2 Cr (+107% YoY), supported by lower interest costs.
- Commissioning of Kocks Block, new reheating furnace, and solar power plant enhancing capacity and operational efficiencies.
- Strong demand across key customer segments and better pricing from OEMs.
Key concerns
- EBITDA beat appears significantly driven by one-time or non-operational items (other income), as EBITDA includes other income; EBITDA per ton disclosed excludes non-operational income, but the exact split is not provided for the current quarter.
- Volume growth at 6.35% YoY, while healthy, is modest compared to the ~74% EBITDA growth, indicating the profit surge is heavily margin/operating-leverage driven and may be sensitive to any reversal in realizations or costs.
- Revenue growth is decelerating from the Q2FY25 peak (+19.3%) and slower than the YoY comparison base (Q1FY26 had lower revenue of ₹433.70 Cr).
Research and educational content only. Not investment advice.