Amara Raja Q2 revenue rose 18.5% as EBITDA fell 3.4%

Amara Raja reported Q2 FY27 consolidated operational revenue of Rs 4,108.7 crore, up 18.5% year on year, but earnings before interest, tax, depreciation and amortisation (EBITDA) fell 3.4% to Rs 361.6 crore and profit after tax (PAT) declined 44.8% to Rs 152.5 crore. Expenses rose 21.2%, faster than revenue, and Q2 FY26 included Rs 121.8 crore of exceptional insurance income.

Why did Amara Raja's Q2 profit fall despite revenue growth?

Amara Raja's reported Q2 FY27 PAT fell because total expenses grew faster than revenue and the comparable quarter included exceptional insurance income. Consolidated expenses increased 21.2% year on year to Rs 3,747.1 crore, exceeding the 18.5% rise in operational revenue to Rs 4,108.7 crore. EBITDA consequently declined to Rs 361.6 crore from Rs 374.3 crore.

The reported comparison also contains a non-recurring base effect. Q2 FY26 included Rs 121.8 crore of exceptional income related to an insurance claim on the tubular plant, while Q2 FY27 recorded no exceptional income or expense. Profit before tax therefore fell 42.8% to Rs 208.5 crore from Rs 364.8 crore, and PAT declined from Rs 276.5 crore to Rs 152.5 crore.

Before exceptional items and tax, profit declined 14.2% to Rs 208.5 crore from Rs 243 crore. Other income decreased 19.3% to Rs 22.6 crore, depreciation rose 7.1% to Rs 161 crore and finance cost increased 63.3% to Rs 14.7 crore. These movements accompanied the reduction in EBITDA and the absence of the prior-year insurance income.

How did Amara Raja's Q2 margins change?

Amara Raja's consolidated EBITDA margin declined 200 basis points to 8.8% in Q2 FY27 from 10.8% in Q2 FY26. A basis point is one-hundredth of a percentage point. PAT margin fell 426 basis points to 3.7% from 8.0%, with the prior-year margin including the Rs 121.8 crore exceptional income.

Sequentially, Q2 FY27 revenue was 2.5% below Q1 FY27, while expenses decreased 1.6%. EBITDA fell 10.9% from Rs 405.9 crore and its margin contracted 83 basis points from 9.6%. PAT declined 20.1% from Rs 190.9 crore, while PAT margin moved down 82 basis points from 4.5%.

Diluted earnings per share was Rs 8.33 in Q2 FY27, compared with Rs 15.11 a year earlier and Rs 10.43 in Q1 FY27. Amara Raja states that the Q2 FY26 diluted earnings per share reflected exceptional income. The Q2 FY27 tax charge was Rs 56 crore, down 36.6% from Rs 88.3 crore, but this did not offset the decline in profit before tax.

Which Amara Raja businesses and markets drove Q2 revenue?

Amara Raja's lead acid business generated Rs 3,876.3 crore, or 94% of consolidated Q2 FY27 revenue. The segment rose from Rs 3,297 crore, or 95% of revenue, in Q2 FY26, but declined from Rs 4,005.2 crore in Q1 FY27. Other business revenue increased to Rs 232.5 crore, or 6%, from Rs 170 crore, or 5%, a year earlier.

Domestic revenue was Rs 3,704.9 crore, or 90% of Q2 FY27 revenue, compared with Rs 2,975.1 crore, or 86%, in Q2 FY26. Export revenue was Rs 403.8 crore, or 10%, versus Rs 491.9 crore, or 14%, a year earlier. The year-on-year increase in total revenue was therefore accompanied by higher domestic revenue and lower export revenue.

Compared with Q1 FY27, domestic revenue decreased from Rs 3,900.1 crore and its share fell from 93% to 90%. Exports increased from Rs 314.4 crore and their share rose from 7% to 10%. This shift occurred as consolidated revenue declined by Rs 105.8 crore quarter on quarter.

What do Amara Raja's half-year results and balance sheet show?

Amara Raja's H1 FY27 operational revenue increased 21.2% year on year to Rs 8,323.3 crore, while EBITDA rose 4.0% to Rs 767.5 crore. Expenses grew 23.3% to Rs 7,555.8 crore, faster than revenue, and EBITDA margin declined 152 basis points to 9.2% from 10.7%.

H1 FY27 PAT fell 22.2% to Rs 343.4 crore from Rs 441.3 crore, and PAT margin declined to 4.1% from 6.4%. H1 FY26 included Rs 121.8 crore of insurance income related to the TBD plant. Profit before exceptional items and tax was Rs 463.2 crore in H1 FY27, down 1.9% from Rs 472 crore.

At H1 FY27, consolidated total assets were Rs 12,300.9 crore, compared with Rs 11,456.7 crore at FY26. Property, plant and equipment rose to Rs 4,172 crore from Rs 3,769.5 crore, while capital work-in-progress declined to Rs 1,402.4 crore from Rs 1,584.7 crore. Equity increased to Rs 8,345.3 crore from Rs 8,099 crore.

Current borrowings increased to Rs 547.2 crore at H1 FY27 from Rs 276.5 crore at FY26, while trade payables rose to Rs 1,564.6 crore from Rs 1,183.7 crore. Inventories increased to Rs 2,686.2 crore and trade receivables to Rs 1,480.1 crore. The current ratio, calculated as current assets divided by current liabilities, moved to 1.5 from 1.6 at FY26.

Conclusion

Amara Raja's Q2 FY27 results show revenue growth alongside lower operating and reported profitability. Revenue rose to Rs 4,108.7 crore, led by Rs 3,704.9 crore of domestic revenue, but expenses rose faster and EBITDA margin declined to 8.8%. The decline in PAT to Rs 152.5 crore also reflects the absence of Q2 FY26's Rs 121.8 crore exceptional insurance income.

The unresolved issue for subsequent periods is whether expense growth, which was 23.3% in H1 FY27 against 21.2% revenue growth, moves closer to the revenue growth rate. Readers can also track whether the H1 EBITDA margin of 9.2%, current borrowings of Rs 547.2 crore and the rise in inventories to Rs 2,686.2 crore change in later disclosures.