20 Microns Limited Q2 growth returns, H1 profit declines

20 Microns Limited returned to year-on-year revenue growth in Q2 FY27, with revenue from operations rising 3.2% to Rs 238.16 crore, but H1 FY27 profit after tax fell 8.3% to Rs 31.38 crore. Gross margin rose 79 basis points to 48.3%, while management said higher energy and freight costs reduced operating profitability.

Why did 20 Microns return to revenue growth in Q2 FY27?

20 Microns returned to revenue growth because Q2 FY27 revenue from operations increased 3.2% year on year to Rs 238.16 crore from Rs 230.78 crore. Management described the quarter as a return to growth after a flat Q1, although H1 FY27 revenue increased by 1.0% to Rs 482.88 crore.

For H1 FY27, revenue from operations rose from Rs 477.95 crore in H1 FY26 to Rs 482.88 crore. Q2 contributed Rs 238.16 crore to the first-half total, compared with Rs 230.78 crore in Q2 FY26, while the presentation did not provide separate Q1 revenue figures or a segment-wise sales breakdown.

Management attributed the improvement in gross profitability to a richer product mix and better raw-material use. In its October 2026 business update, 20 Microns described its portfolio as surface-engineered mineral inputs and functional additives, with more than 250 specialised grades and more than 1,000 customers.

How did 20 Microns' H1 FY27 profit and margins change?

20 Microns improved gross margin in H1 FY27 but reported lower operating and net profit. Gross margin increased to 48.3% from 47.5%, while earnings before interest, tax, depreciation and amortisation, or EBITDA, fell 5.5% to Rs 60.13 crore and EBITDA margin declined to 12.5% from 13.3%.

The Q2 comparison showed a larger operating-margin movement. Q2 EBITDA declined 12.9% to Rs 27.73 crore from Rs 31.85 crore, and EBITDA margin fell 216 basis points to 11.6% from 13.8%, despite gross margin increasing 14 basis points to 47.7%.

Profit after tax fell faster than revenue in Q2 FY27, declining 21.4% to Rs 13.64 crore from Rs 17.35 crore. For H1 FY27, profit before tax declined 6.4% to Rs 43.38 crore, while earnings per share decreased 8.2% to Rs 8.91 from Rs 9.71.

What costs reduced 20 Microns' operating profit?

Higher energy and freight costs reduced 20 Microns' operating margin in H1 FY27, according to management. The company said its 12.5% EBITDA margin absorbed those costs, explaining why the 79-basis-point gain in gross margin did not translate into higher EBITDA.

The first-half figures show different movements in gross and operating profitability. Gross margin rose 79 basis points to 48.3%, whereas EBITDA margin fell 85 basis points to 12.5%; in Q2 FY27, gross margin rose 14 basis points but EBITDA margin declined 216 basis points.

Some expenses below EBITDA moved favourably. Finance cost fell 11.3% in H1 FY27 to Rs 8.11 crore from Rs 9.14 crore and decreased 5.5% in Q2 to Rs 4.20 crore, while depreciation and amortisation increased 2.9% in H1 to Rs 10.75 crore.

Management also said customer collections became faster during H1 FY27 and reported net debt to equity of 0.16 times. The reduction in finance cost partly moderated the profit impact, but it did not offset the Rs 3.47 crore decline in H1 EBITDA from Rs 63.60 crore a year earlier.

How does 20 Microns plan to restore operating margins?

20 Microns plans to pursue operating-margin recovery through pricing and efficiency in H2 FY27 while executing its capacity-expansion programme on schedule. Management identified these actions as its H2 priorities after H1 EBITDA margin declined to 12.5% from 13.3% in H1 FY26.

The company is undertaking a Rs 100 crore capacity expansion to scale specialty and value-added products. Management said the programme includes Malaysian operations and the Sievert joint venture, and is intended to expand the product range beyond paints into plastics, polymers, rubber and adhesives.

Supply integration forms another disclosed part of the programme. In Q2 FY27, 20 Microns acquired captive mines in Rajasthan and Andhra Pradesh for Rs 7 crore in total, securing talc in Anantapur and quartz and feldspar in Bhilwara; production from the acquired mines is planned to start in December 2026.

The company reported 13.5 million tonnes of mining leases across six sites in four states. Management said captive mines, multiple sources for key minerals and a broad product and market mix are intended to manage sourcing and trade-flow exposure, including the Uttarakhand talc-mining pause since January 2025 and barytes export licensing introduced in April 2026.

Conclusion

20 Microns' H1 FY27 results show that the return to Q2 revenue growth and the improvement in gross margin have not yet restored operating or net profit growth. H1 revenue increased 1.0% to Rs 482.88 crore and gross margin rose to 48.3%, but EBITDA declined 5.5% to Rs 60.13 crore and profit after tax decreased 8.3% to Rs 31.38 crore.

The next result will indicate whether management's pricing and efficiency measures affect the 12.5% H1 EBITDA margin. Execution of the Rs 100 crore capacity plan and the planned December 2026 production start at the acquired mines are also disclosed milestones for 20 Microns' specialty-product and supply strategy.