Arihant H1 EBITDA falls 17% as operating costs outpace revenue

Arihant Superstructures Limited reported H1 FY27 EBITDA of Rs 55.5 crore, down 16.95% year on year, even as operating revenue rose 8.70% to Rs 264.8 crore; operating expenses increased 18.40% to Rs 209.3 crore, reducing EBITDA margin by 647 basis points to 20.97%.

Why did Arihant’s H1 EBITDA decline despite revenue growth?

Arihant’s H1 EBITDA declined because operating expenses grew more than twice as fast as operating revenue. For the half year, revenue increased by Rs 21.2 crore, from Rs 243.6 crore in H1 FY26 to Rs 264.8 crore in H1 FY27. Expenses, however, increased by Rs 32.5 crore, from Rs 176.8 crore to Rs 209.3 crore. That difference left EBITDA at Rs 55.5 crore, compared with Rs 66.8 crore a year earlier.

The margin movement shows the effect of this cost-revenue gap. EBITDA, or earnings before interest, tax, depreciation and amortisation, margin was 20.97% in H1 FY27, versus 27.44% in H1 FY26. The 647-basis-point decline was the largest percentage-margin change reported in the half-year table. A basis point is one-hundredth of a percentage point. Arihant did not provide a category-wise split of the Rs 209.3 crore operating-expense figure in the presentation.

How did Arihant’s Q2 profitability change from Q1 and last year?

Arihant’s Q2 FY27 EBITDA improved sequentially but remained below the prior-year quarter. EBITDA rose 1.48% from Rs 27.6 crore in Q1 FY27 to Rs 28 crore in Q2 FY27, while operating revenue increased 1.24% to Rs 133.2 crore. The EBITDA margin consequently moved 5 basis points higher to 20.99% from 20.94% in Q1 FY27.

Against Q2 FY26, the comparison was less favourable at the operating-profit level. Q2 FY27 revenue was 8.62% higher than the Rs 122.7 crore reported a year earlier, but operating expenses rose 13.59% to Rs 105.3 crore. EBITDA therefore declined 6.63% from Rs 29.9 crore. The financial-performance table puts Q2 EBITDA margin at 20.99%, 338 basis points below the 24.37% reported for Q2 FY26.

Profit after tax, or PAT, showed a different quarterly pattern. Q2 FY27 PAT increased 7.88% sequentially to Rs 10.6 crore from Rs 9.8 crore in Q1 FY27, and was 6.00% above Rs 10 crore in Q2 FY26. PAT margin rose to 7.92% from 7.43% in Q1 FY27, although it was 23 basis points below the 8.15% reported in Q2 FY26. Basic earnings per share were Rs 1.56 in Q2 FY27, compared with Rs 1.39 in Q1 FY27 and Rs 1.41 a year earlier.

What do Arihant’s sales and collections show for Q2 FY27?

Arihant reported Q2 FY27 pre-sales of Rs 172.7 crore from 236 units, lower than the Rs 173.1 crore value of sales reported in Q1 FY27 and the Rs 235.8 crore reported in Q2 FY26. Sales value declined by Rs 0.4 crore sequentially and by Rs 63.1 crore year on year. The company reported 221 units sold in Q1 FY27 and 280 units in Q2 FY26, compared with 236 in the latest quarter.

Area sold also fell despite the sequential increase in units sold. Arihant reported 2.21 lakh square feet of area sold in Q2 FY27, compared with 2.31 lakh square feet in Q1 FY27 and 2.89 lakh square feet in Q2 FY26. The mix of unit sales, area sold and sales value was not broken down by project, location or customer segment in the presentation, so it does not establish the reason for the change in sales value.

Collections were Rs 154.5 crore in Q2 FY27, down from Rs 161.2 crore in Q1 FY27 but above Rs 111 crore in Q2 FY26. The company also reported unsold inventory of 275 units valued at Rs 52.9 crore at the end of the quarter. These figures sit alongside Q2 operating revenue of Rs 133.2 crore, but the presentation does not provide a reconciliation between pre-sales, collections and revenue recognition.

How did financing and non-operating items affect Arihant’s H1 profit?

Arihant’s H1 profit before tax fell faster than revenue, declining 22.68% to Rs 26.8 crore from Rs 34.6 crore in H1 FY26. EBITDA fell by Rs 11.3 crore over the same comparison, while other income decreased from Rs 3.2 crore to Rs 3 crore. Depreciation increased 6.89% to Rs 1.4 crore, according to the half-year financial table.

Interest expense provided a partial offset to the EBITDA reduction. H1 interest declined 10.90% to Rs 30.4 crore from Rs 34.1 crore, a reduction of Rs 3.7 crore. Tax expense also declined 26.55% to Rs 6.4 crore from Rs 8.7 crore. Even so, PAT dropped by Rs 5.6 crore to Rs 20.3 crore, and PAT margin reduced by 294 basis points to 7.68% from 10.62%.

The quarterly sequence similarly shows lower interest alongside a recovery in post-tax profit. Q2 FY27 interest was Rs 14.8 crore, 4.66% lower than Rs 15.5 crore in Q1 FY27 and 13.07% lower than Rs 17 crore in Q2 FY26. Q2 profit before tax rose 8.26% sequentially to Rs 13.9 crore, while tax increased 9.45% to Rs 3.4 crore. Arihant’s presentation does not state whether the lower interest cost reflects debt reduction, borrowing-rate changes or another factor.

Conclusion

Arihant’s H1 FY27 results show that revenue growth did not translate into operating-profit growth: revenue rose 8.70% to Rs 264.8 crore, while expenses rose 18.40% to Rs 209.3 crore, cutting EBITDA to Rs 55.5 crore and reducing margin to 20.97%. Q2 PAT of Rs 10.6 crore improved from Rs 9.8 crore in Q1, but Q2 EBITDA of Rs 28 crore remained below the Rs 29.9 crore reported a year earlier.

The next disclosures will show whether Arihant can narrow the gap between expense and revenue growth while converting sales into collections. Management also disclosed a plan to develop a 227-key Mementos by ITC Hotels luxury resort, with more than 70,000 square feet of indoor banquets and 100,000 square feet of outdoor event space; its future execution and financial contribution were not quantified in the presentation.