Walchan. Inds. Q1 FY27 Results (NSE: WALCHANNAG)
Signal: Loss reversed
The read
The business has returned to profitability with PAT of 118 lakh versus a 1,039 lakh loss YoY, but the quality of the recovery is mixed: revenue growth of 83.8% was accompanied by a 495bps gross-margin compression, finance costs of 1,001 lakh and other income of 697 lakh.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹90.83 Cr | +83.8% | -2.4% |
| Net profit | ₹1.18 Cr | N/M | |
| EPS | ₹0.17 | N/M | |
| EBIT margin | N/A |
P&L walk
Revenue increased 83.8% YoY to 9,083 lakh but declined 2.4% QoQ; gross margin fell 495bps YoY to 42.2% as raw material costs rose to 58.8% of revenue, while PAT improved to 118 lakh from a loss of 1,039 lakh with other income of 697 lakh supporting earnings.
Segments
Foundry and Machine Shop was the main inflection, with revenue rising to 1,534 lakh from 202 lakh and segment result turning profitable at 151 lakh from a 149 lakh loss; Heavy Engineering remained the largest contributor at 7,011 lakh revenue and 469 lakh result but declined sequentially.
Key positives
- Revenue increased 83.8% YoY to 9,083 lakh, with Foundry and Machine Shop revenue rising 659.4% YoY to 1,534 lakh.
- Foundry and Machine Shop segment result turned positive at 151 lakh from a 149 lakh loss YoY.
- PAT turned positive at 118 lakh from a 1,039 lakh loss YoY, and EPS improved to ₹0.17 from ₹(1.54).
- Employee benefits expense grew 17.8% YoY to 2,208 lakh, materially below revenue growth of 83.8%, supporting fixed-cost absorption despite gross-margin pressure.
Key concerns
- Gross margin compressed 495bps YoY to 42.2%, with raw material cost increasing to 58.8% of revenue from 50.4%; the filing does not disclose the cause.
- Finance costs rose 1.5% YoY to 1,001 lakh and remain large relative to PAT of 118 lakh.
- Heavy Engineering revenue declined 7.7% QoQ to 7,011 lakh and its segment result fell 57.4% QoQ to 469 lakh.
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