Azad Q2FY27 revenue rises 31.6% while PAT falls 6.6%

Azad Engineering Ltd. reported record Q2FY27 revenue of Rs 187.80 crore, up 31.6% year on year, but profit after tax fell 6.6% to Rs 30.82 crore. Azad said higher employee expenses, depreciation and recurring finance costs, together with lower recurring other income, offset the increase in reported EBITDA.

Why did Azad’s profit fall despite record quarterly revenue?

Azad’s Q2FY27 profit after tax declined because costs below EBITDA and lower recurring other income more than offset higher operating earnings. Revenue from operations increased from Rs 142.67 crore in Q2FY26 to Rs 187.80 crore, while reported earnings before interest, tax, depreciation and amortisation (EBITDA) rose 37.1% from Rs 51.38 crore to Rs 70.44 crore. Profit before tax nevertheless declined 12.2% to Rs 41.08 crore.

Employee expenses rose to Rs 50.29 crore from Rs 32.47 crore as infrastructure and technical capabilities expanded, according to Azad. Depreciation and amortisation increased to Rs 21.79 crore from Rs 10.89 crore as new facilities were capitalised, while recurring finance cost rose to Rs 12.23 crore from Rs 6.40 crore because of additional working-capital loans supporting growth.

Recurring other income fell to Rs 4.66 crore in Q2FY27 from Rs 12.72 crore in Q2FY26. Azad attributed the reduction to lower treasury income after deployment of funds raised through its initial public offering and qualified institutional placement. The Rs 19.06 crore increase in reported EBITDA therefore did not prevent a Rs 2.18 crore decline in quarterly profit after tax.

How did Azad’s Q2FY27 margins compare with last year?

Azad’s reported EBITDA margin rose by 1.5 percentage points, while its profit after tax margin declined by 6.7 percentage points. EBITDA margin reached 37.5% in Q2FY27, compared with 36.0% in Q2FY26, whereas profit after tax margin fell to 16.4% from 23.1%. The difference reflects the increased depreciation and finance cost and the lower recurring other income after EBITDA.

The cost mix within operations also changed in Q2FY27. Consumption declined to Rs 7.90 crore from Rs 17.68 crore, while employee expenses increased by Rs 17.82 crore and other expenses rose to Rs 59.16 crore from Rs 41.13 crore. Lower consumption helped lift EBITDA margin to 37.5%, but it did not offset the charges and income reduction recorded below EBITDA.

What do Azad’s first-half results show?

Azad’s H1FY27 revenue and reported EBITDA rose, and profit after tax increased despite a decline in profit before tax. Revenue grew 29.3% to Rs 358.32 crore from Rs 277.18 crore, while reported EBITDA increased 34.7% to Rs 134.51 crore from Rs 99.90 crore. The reported EBITDA margin was 37.5%, compared with 36.0% in H1FY26.

Profit before tax declined 9.0% to Rs 81.17 crore in H1FY27 from Rs 89.24 crore a year earlier. Profit after tax increased 6.6% to Rs 67.17 crore from Rs 62.99 crore because tax was Rs 14.00 crore, compared with Rs 26.25 crore in H1FY26. Profit after tax margin still fell by 4.0 percentage points to 18.7% from 22.7%.

The first-half figures show that the Q2FY27 quarterly profit decline did not result in a first-half decline in profit after tax. However, the gap between the 37.5% EBITDA margin and the 18.7% profit after tax margin was wider than in H1FY26, when the corresponding margins were 36.0% and 22.7%.

How is Azad’s capacity build-out affecting cash and the balance sheet?

Azad’s capacity build-out increased property, plant and equipment, working-capital balances and borrowings by September 2026. Property, plant and equipment rose to Rs 956.85 crore from Rs 744.77 crore at March 2026, while capital work-in-progress was Rs 212.49 crore. Azad had 44,800 square metres across six customer-dedicated facilities for four global original equipment manufacturers.

Two new dedicated lean manufacturing facilities for GE Vernova Gas Power were inaugurated in September 2026, adding 7,600 square metres each. GE Vernova then had three dedicated facilities in Azad’s network. The company’s September 2026 balance sheet also showed inventories rising to Rs 424.80 crore from Rs 326.63 crore and trade receivables increasing to Rs 401.62 crore from Rs 309.24 crore at March 2026.

In the Sep-26 cash-flow comparison, net cash used in operating activities was Rs 45.82 crore, compared with Rs 76.53 crore in Sep-25. Working-capital changes used Rs 157.54 crore, while net cash from financing activities was Rs 74.72 crore. Current borrowings increased to Rs 272.25 crore from Rs 173.24 crore at March 2026, and cash and cash equivalents ended at Rs 10.33 crore, against Rs 23.58 crore at the start of the period.

Conclusion

Azad’s Q2FY27 results combine higher operating scale with lower quarterly net profit. Revenue reached a record Rs 187.80 crore and reported EBITDA margin increased to 37.5%, but profit after tax fell to Rs 30.82 crore as employee expenses, depreciation, recurring finance cost and the reduction in recurring other income affected earnings after EBITDA.

The next disclosed capacity marker is the conversion of the company’s manufacturing build-out into revenue and cash flow. Azad’s company snapshot lists about 94,899 square metres under construction, including six facilities already inaugurated, while the September 2026 network had 44,800 square metres across six customer-dedicated facilities. Changes in inventories, trade receivables, working-capital borrowings and depreciation will show how that expansion is progressing.