VST Till. Tract. Q2 FY27 Results (NSE: VSTTILLERS)
Signal: Margin pressure
The read
The key inflection is gross margin expanding 430bps YoY to 32.8%, but the benefit did not reach earnings: EBITDA margin fell to an estimated 10.9%, EBIT declined 20.6% to ₹2,944 lakh and PAT fell 10.3% to ₹2,241 lakh. The quarter also shows weaker cash conversion, with H1 operating cash flow down 61.1% to ₹2,430 lakh.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹321.65 Cr | +2.1% | +2.6% |
| EBIT | ₹29.44 Cr | -20.6% | |
| Net profit | ₹22.41 Cr | -10.3% | |
| EPS | ₹26.9 | -10.0% | |
| EBIT margin | 10.9% |
P&L walk
Revenue increased 2.1% YoY to ₹32,165 lakh, gross margin expanded to 32.8%, but EBIT fell 20.6% to ₹2,944 lakh and PAT declined 10.3% to ₹2,241 lakh; the quarter also included a ₹36 lakh joint-venture loss.
Key positives
- Revenue increased 2.1% YoY to ₹32,165 lakh and 2.6% QoQ, extending the recent growth trend after Q1FY27 revenue of ₹31,340 lakh.
- Gross margin expanded 430bps YoY to 32.8% as material inputs declined to 67.3% of revenue from 71.6%; the filing does not disclose whether the improvement came from pricing, input costs or mix.
- Finance costs declined to ₹44 lakh from approximately ₹57 lakh YoY, while the consolidated balance sheet remained effectively debt-free.
Key concerns
- PAT declined 10.3% YoY to ₹2,241 lakh despite revenue growth and gross-margin expansion, showing weak operating conversion.
- Estimated EBITDA margin compressed to 10.9% from approximately 12.8% YoY as employee costs rose 11.2% and other expenses rose 11.0%, both ahead of revenue growth.
- H1 operating cash flow fell 61.1% YoY to ₹2,430 lakh as inventories increased to ₹16,572.52 lakh and receivables to ₹21,111.25 lakh.
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