Alufluoride Q2 profit rises 91% as materials costs fall

Alufluoride Limited reported Q2FY27 profit after tax of Rs 15.2 crore, up 91% year on year, after materials costs fell to 36.4% of revenue from 48.8% despite revenue increasing 17% to Rs 63.9 crore. The quarter followed the supplier-reported resolution of a feedstock supply constraint on 15 July 2026.

Why did Alufluoride's Q2FY27 profit rise 91%?

Alufluoride's Q2FY27 profit rose because lower materials costs had a larger earnings effect than the 17% increase in revenue. Profit before tax, or PBT, increased 81% year on year to Rs 20.5 crore from Rs 11.3 crore, while profit after tax, or PAT, reached Rs 15.2 crore from Rs 7.9 crore. Earnings per share increased to Rs 19.38 from Rs 10.14.

Revenue from operations was Rs 63.9 crore in Q2FY27, compared with Rs 54.8 crore in Q2FY26. All operating revenue came from aluminium fluoride, or AlF₃, while captive solar recorded no revenue in either quarter. Total income increased 18% to Rs 65.2 crore because other income rose to Rs 1.3 crore from Rs 0.4 crore.

The presentation attributes about Rs 7.9 crore of the Rs 9.2 crore year-on-year PBT increase to lower materials cost. Higher revenue added about Rs 2.3 crore and other income added about Rs 0.9 crore, while other costs reduced the gain by about Rs 2.0 crore. The effective tax rate also declined to 26.1% from 29.9%, helping PAT grow faster than PBT.

How did Alufluoride's materials costs change in Q2FY27?

Alufluoride reduced materials cost, net of inventory change, by 13% to Rs 23.3 crore in Q2FY27 from Rs 26.7 crore in Q2FY26. As a share of revenue, the cost line declined by 12.4 percentage points to 36.4% from 48.8%. Management linked the reduction to alumina hydrate bought ahead and prices agreed in May 2026.

The lower materials ratio lifted earnings before interest, tax, depreciation and amortisation, or EBITDA, margin before other income to 36.1% from 25.4%, an expansion of 1,070 basis points. EBITDA before other income was Rs 23.1 crore, compared with Rs 13.9 crore a year earlier, while cash operating cost was nearly unchanged at Rs 40.8 crore versus Rs 40.9 crore despite the increase in revenue.

Not every cost line declined in Q2FY27. Power and fuel rose 18% to Rs 8.7 crore and were 13.6% of revenue, compared with 13.5% a year earlier. Employee benefits increased 52% to Rs 3.8 crore, or 6.0% of revenue against 4.6%, while other expenses including freight rose 18% to Rs 5.0 crore.

Management said the benefit from forward-bought inventory would taper as stocks are consumed. It also identified freight on fluosilicic acid, or FSA, from more distant sources as an expense exposed to rising fuel prices. Finance cost rose 57% to Rs 97 lakh and depreciation increased 21% to Rs 2.89 crore, reflecting the capitalised expansion.

What changed in Alufluoride's FSA supply and capacity?

Alufluoride's operating recovery followed the supplier's reported resolution of the FSA constraint on 15 July 2026. The constraint had been disclosed on 23 May 2026, and Q2FY27 revenue was 2.4 times Q1FY27 revenue as Visakhapatnam operations returned towards normal. FSA is the feedstock variable management says it monitors most closely.

The final phase of the expansion, commissioned in June 2026, was available for the whole of Q2FY27. At 30 September 2026, net block stood at Rs 92.9 crore, up from Rs 65.0 crore at 31 March 2026, while capital work in progress fell to Rs 1.8 crore from Rs 22.5 crore as the expansion was capitalised.

Alufluoride said it widened its supplier base with a new source from April 2026 and has long-term contracts with phosphatic fertiliser producers. The company receives FSA from an adjacent fertiliser complex and distant sources including IFFCO Paradeep and Coromandel Kakinada, subject to its quality specification. Distant sourcing carries freight exposure when fuel prices rise.

How did Alufluoride's half-year performance and balance sheet compare?

Alufluoride's H1FY27 PAT rose 62% to Rs 17.9 crore despite an 8% decline in revenue to Rs 90.5 crore. The Q1FY27 supply shortfall held back first-half sales compared with Rs 98.6 crore in H1FY26, but EBITDA increased 43% to Rs 31.3 crore and PBT rose 51% to Rs 23.8 crore.

The September 2026 balance sheet showed net worth of Rs 140.6 crore, up Rs 14.9 crore from March 2026. Cash and investments increased to Rs 62.9 crore from Rs 45.0 crore, while borrowings rose to Rs 34.3 crore from Rs 28.5 crore. Inventories increased by Rs 8.1 crore to Rs 29.1 crore and trade receivables rose by Rs 8.0 crore to Rs 18.9 crore alongside higher activity.

Alufluoride declared an interim dividend of Rs 2.5 per share for H1FY27. Other income of Rs 1.3 crore represented 6.4% of Q2FY27 PBT, up from 3.5% in Q2FY26 but below the 71% share reported for Q1FY27, when operating profit was affected by the supply disruption.

Conclusion

Alufluoride's Q2FY27 results indicate that restored FSA availability and a lower materials-cost ratio mattered more to profit growth than revenue growth alone. Revenue increased by Rs 9.1 crore year on year, while EBITDA rose by Rs 10.1 crore and PAT rose by Rs 7.3 crore, taking EBITDA margin before other income to 36.1%.

The next factors to watch are management's disclosed inventory benefit as forward-bought stocks are consumed, FSA freight from distant sources, and the operating contribution of the expansion commissioned in June 2026. The supplier-base widening that began in April 2026 and annual pricing agreed with smelters will also affect whether the Q2FY27 cost structure persists.