Bhatia's Q2 profit more than doubles as EBITDA margin hits 6%

Bhatia Communications & Retail (India) Ltd. more than doubled Q2FY27 net profit to Rs 7.5 crore, up 101% year on year, while EBITDA margin increased 132 basis points to 6.0%. Revenue from operations grew 52% to Rs 203.7 crore, and management attributed the margin expansion to store maturation and operating efficiencies.

How did Bhatia's Q2FY27 profit and margins change?

Bhatia's Q2FY27 net profit rose to Rs 7.5 crore from Rs 3.7 crore in Q2FY26, an increase of 101%, while profit before tax increased 108% to Rs 9.8 crore. Revenue from operations rose by Rs 69.4 crore to Rs 203.7 crore, meaning profit grew faster than sales during the quarter. Diluted earnings per share increased 104% to Rs 0.53 from Rs 0.26.

The higher profit was accompanied by expansion at several levels of the income statement. Gross profit rose 91% to Rs 26.2 crore and gross margin increased to 12.8% from 10.2%, a gain of 264 basis points, where one basis point equals one-hundredth of a percentage point. Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 95% to Rs 12.2 crore, while EBITDA margin rose from 4.7% to 6.0%.

What drove Bhatia's Q2FY27 margin expansion?

Bhatia's management attributed the 132-basis-point Q2FY27 EBITDA-margin increase to 6.0% to store maturation and operating efficiencies. Gross margin expanded by 264 basis points to 12.8%, as cost of goods sold grew 47% to Rs 177.5 crore, below the 52% increase in revenue. This difference was accompanied by gross profit rising to Rs 26.2 crore from Rs 13.7 crore.

Operating costs also grew more slowly than gross profit. Other expenses increased 80% to Rs 14.6 crore, compared with the 91% increase in gross profit, while other income declined 13% to Rs 0.6 crore. Depreciation increased 116% to Rs 1.4 crore, but interest was broadly unchanged at Rs 0.9 crore, up 4%, leaving profit before tax 108% higher at Rs 9.8 crore.

How did Bhatia's H1FY27 performance compare?

Bhatia's H1FY27 revenue grew 60% to Rs 393.7 crore, compared with 52% growth in Q2FY27, while H1FY27 EBITDA rose 84% to Rs 23.0 crore. H1FY27 net profit increased 96% to Rs 14.3 crore from Rs 7.3 crore in H1FY26. The first-half EBITDA margin improved 75 basis points to 5.8%, below the 6.0% reported for Q2FY27.

Bhatia's reported Q2FY27 revenue of Rs 203.7 crore and EBITDA of Rs 12.2 crore within H1FY27 revenue of Rs 393.7 crore and EBITDA of Rs 23.0 crore. First-half gross margin rose 163 basis points to 12.2%, compared with a 264-basis-point increase in the second quarter. Profit after tax, or PAT, margin improved 66 basis points to 3.6% in H1FY27, while Q2FY27 PAT margin was 3.7%.

What do Bhatia's operating indicators show?

Bhatia's H1FY27 same-store sales growth was 32.1%, compared with 6.8% in H1FY26, showing that reported growth included sales from existing stores. The company reported 149,000 bill cuts in H1FY27, up 15% from 130,000, while average selling price rose 46% to Rs 27,063 from Rs 18,476. These indicators accompanied the 60% first-half increase in revenue.

Bhatia's network reached 428 stores in H1FY27 from 253 stores a year earlier, a 69% increase, while retail footprint rose 68% to 325,000 square feet from 193,697 square feet. Management said it added 90 stores in 90 days, taking the network across six states and one Union Territory. Mobiles accounted for 98% of H1FY27 product mix, up from 97%, while mobile accessories fell to 1% from 2% and lifestyle remained at 1%.

What changed in Bhatia's balance sheet and cash flow?

Bhatia's total assets increased to Rs 275.4 crore at September 2026 from Rs 198.5 crore at March 2026, while total equity rose to Rs 146.7 crore from Rs 132.6 crore. Inventory increased by Rs 51.7 crore to Rs 148.0 crore, and current borrowings rose to Rs 36.7 crore from Rs 1.9 crore. Cash and cash equivalents increased to Rs 16.7 crore from Rs 8.6 crore over the same period.

Bhatia's net cash flow from operating activities was negative Rs 18.4 crore in the period ended September 2026, compared with negative Rs 5.9 crore in the period ended September 2025. Cash generated from operations was negative Rs 12.7 crore after negative Rs 34.4 crore of working-capital movements, versus negative Rs 1.1 crore after negative Rs 12.3 crore a year earlier. Financing activities generated Rs 32.7 crore, contributing to an Rs 8.1 crore increase in cash.

Conclusion

Bhatia's Q2FY27 result combined 52% revenue growth with a 101% increase in net profit and a 132-basis-point expansion in EBITDA margin. Gross margin rose to 12.8% as cost of goods sold grew more slowly than revenue, while other expenses grew more slowly than gross profit. The H1FY27 trend was similar, with revenue up 60%, EBITDA up 84% and net profit up 96%.

Next, investors can watch whether Bhatia's planned two additional H2FY27 stores support management's stated focus on scaling the network and accelerating store-level profitability. Same-store sales growth was 32.1% in H1FY27 and average selling price was Rs 27,063. Inventory of Rs 148.0 crore, current borrowings of Rs 36.7 crore and negative operating cash flow of Rs 18.4 crore at September 2026 are also disclosed measures to track as expansion proceeds.