Welspun Special. Q2 FY27 Results (NSE: WELSPLSOL)
Signal: Slipped to loss
The read
The key inflection is a reversal from the prior quarter's margin recovery: Q2 revenue rose 0.5% YoY to ₹24,033 lakh, but gross margin compressed 414bps YoY to 26.2% and EBITDA margin fell 573bps to 1.8%, turning PAT from ₹965 lakh profit into a ₹451 lakh loss; confirmation requires whether input-cost pressure persists next quarter.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹240.33 Cr | +0.5% | +24.1% |
| EBIT | ₹-0.38 Cr | -102.7% | |
| Net profit | ₹-4.51 Cr | -146.7% | |
| EPS | ₹-0.07 | -150.0% | |
| EBIT margin | 1.8% |
P&L walk
Revenue recovered to ₹24,033 lakh, +0.5% YoY and +24.1% QoQ, but gross margin compressed to 26.2% from 30.4% and EBITDA margin fell to 1.8%, driving EBIT to a ₹38 lakh loss and PAT to a ₹451 lakh loss.
Key positives
- Revenue recovered to ₹24,033 lakh, +24.1% QoQ and +0.5% YoY, after the ₹19,367 lakh Q1FY27 base.
- Finance costs fell 20.4% YoY to ₹347 lakh and borrowings were nil at 30-Sep-26 versus ₹3,509 lakh at 31-Mar-26.
- Property, plant and equipment increased 25.2% to ₹24,732 lakh while CWIP declined to ₹878 lakh from ₹4,887 lakh, indicating assets moving from construction toward operations.
Key concerns
- Gross margin compressed 414bps YoY to 26.2% and 825bps QoQ, with raw materials plus inventory change at 73.8% of revenue versus 69.6% YoY; the company did not disclose the cause.
- EBITDA fell to ₹443 lakh from ₹1,809 lakh YoY and ₹1,433 lakh QoQ, taking EBITDA margin down to 1.8% from 7.6% YoY and 7.4% QoQ.
- Half-year operating cash flow was negative ₹4,485 lakh versus negative ₹1,998 lakh YoY, while inventory rose to ₹31,530 lakh from ₹25,751 lakh.
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