Aptech Q2 EBITDA rises 37.9% as margin reaches 10.8% in FY27

Aptech Limited reported Q2FY27 EBITDA of Rs 16.40 crore, up 37.9% year on year, as total income increased 9.0% to Rs 151.59 crore and total expenditure rose 6.2% to Rs 135.19 crore. Aptech’s EBITDA margin reached 10.8%, 227 basis points above Q2FY26.

How did Aptech’s Q2FY27 earnings change?

Aptech’s Q2FY27 EBITDA rose faster than income, increasing by Rs 4.51 crore from Rs 11.89 crore in Q2FY26 to Rs 16.40 crore. Total income, which includes income from operations and other income, increased by Rs 12.46 crore to Rs 151.59 crore. Income from operations rose 9.5% to Rs 147.68 crore, while other income declined 8.0% to Rs 3.91 crore.

Aptech’s reported profit after tax, or PAT, grew 42.3% year on year to Rs 9.19 crore in Q2FY27, lifting reported PAT margin to 6.1% from 4.6%. Profit before tax excluding exceptional items increased 49.6% to Rs 13.76 crore, but profit before tax including exceptional items was Rs 11.70 crore after an exceptional item of Rs 2.05 crore. The presentation does not specify the nature of that exceptional item.

Why did Aptech’s EBITDA margin expand in Q2FY27?

Aptech’s EBITDA margin expanded because total expenditure increased 6.2%, slower than the 9.0% increase in total income. The margin rose from 8.5% in Q2FY26 to 10.8% in Q2FY27, an improvement of 227 basis points. It also increased from 9.4% in Q1FY27, a sequential improvement of 143 basis points.

The expenditure composition shows employee-benefit expense rose 2.8% year on year to Rs 18.55 crore, compared with total income growth of 9.0%. Other expenses, the largest cost line, rose 7.1% to Rs 116.42 crore from Rs 108.73 crore. Purchases of stock-in-trade more than doubled to Rs 93 lakh, while changes in inventories were negative Rs 72 lakh in Q2FY27 versus positive Rs 2 lakh a year earlier.

Depreciation and amortisation rose 5.9% to Rs 2.17 crore, below the 37.9% EBITDA increase, resulting in earnings before interest and tax, or EBIT, of Rs 14.23 crore, up 44.6%. Finance costs fell 26.8% to Rs 47 lakh from Rs 65 lakh. Tax expense declined 7.9% to Rs 2.52 crore, supporting the rise in reported PAT to Rs 9.19 crore.

Which Aptech businesses drove Q2FY27 revenue and EBIT?

Aptech’s retail business drove Q2FY27 revenue growth, while the institutional business returned to positive EBIT from a loss in Q2FY26. Retail revenue grew 12.2% year on year to Rs 121.70 crore, contributing Rs 13.20 crore of the Rs 12.80 crore increase in consolidated revenue from operations. Institutional revenue declined 1.5% to Rs 25.98 crore in the quarter.

Retail EBIT was Rs 16.93 crore, down 0.5% from Rs 17.02 crore a year earlier despite higher revenue. Accordingly, retail EBIT margin declined 1,177 basis points to 13.9% from 15.7%. On a sequential basis, retail revenue rose 19.2% from Rs 102.11 crore in Q1FY27 and retail EBIT rose 34.5% from Rs 12.59 crore, with its margin increasing 159 basis points from 12.3%.

Institutional EBIT was Rs 2.72 crore in Q2FY27, compared with a Rs 1.92 crore loss in Q2FY26. That change moved institutional EBIT margin to 10.5% from negative 7.3%, an improvement of 1,773 basis points. However, institutional revenue was also 17.9% below the Rs 31.64 crore recorded in Q1FY27, and institutional EBIT declined 9.2% sequentially from Rs 3.00 crore.

What changed in Aptech’s first half and what is management planning?

Aptech’s H1FY27 total income increased 9.4% year on year to Rs 289.14 crore, while EBITDA rose 21.8% to Rs 29.31 crore. The H1FY27 EBITDA margin was 10.1%, compared with 9.1% in H1FY26. Reported PAT rose 27.7% to Rs 16.83 crore, and reported PAT margin increased 83 basis points to 5.8%.

The segment mix differed over the half year from the second quarter alone. Retail revenue increased 8.7% to Rs 223.81 crore and institutional revenue increased 16.8% to Rs 57.62 crore. Retail EBIT fell 4.4% to Rs 29.52 crore, reducing its EBIT margin by 180 basis points to 13.2%. Institutional EBIT moved to Rs 5.72 crore from a Rs 1.01 crore loss, taking its margin to 9.9% from negative 2.0%.

Management’s stated way-forward plan includes testing and training, scalable partnerships, selective expansion in key states and departments, and a de-risked portfolio focused on payment cycles and repeat clients. The plan also identifies faster collections, lean working capital, technology-assisted evaluation, technology platforms and algorithm-led question banks as operating priorities. The presentation provides no quantified revenue, margin or earnings target for these initiatives.

Conclusion

Aptech’s Q2FY27 results show operating profit and reported PAT growing faster than total income: EBITDA rose 37.9% against 9.0% income growth, and EBITDA margin increased to 10.8%. Retail remained the larger business at Rs 121.70 crore of quarterly revenue, but its year-on-year EBIT margin declined, whereas institutional EBIT turned positive despite a small quarterly revenue decline.

The next result periods will show whether Aptech can maintain its expenditure-to-income gap while improving the retail margin and sustaining institutional profitability. Management’s disclosed plan places particular emphasis on selective state and department expansion, faster collections, lean working capital, repeat clients and technology-assisted evaluation, but it has not set quantified financial targets or a timetable for those actions.