Dhoot Transmission Q2 FY27 revenue rose 61%, margin fell 14.3%

Dhoot Transmission Limited reported Q2 FY27 revenue from operations of Rs 1,827.2 crore, up 60.7% year on year, while its earnings before interest, tax, depreciation and amortisation (EBITDA) margin fell 330 basis points to 14.3% from 17.6%. Management attributed the compression to copper, PVC, employee and ESOP costs, plus lower-margin Multilink operations.

Why did Dhoot Transmission's Q2 EBITDA margin decline?

Dhoot Transmission's Q2 EBITDA margin declined because revenue growth trailed increases in material, employee and other costs. EBITDA rose 30.5% year on year to Rs 261.8 crore in Q2 FY27, compared with Rs 200.6 crore in Q2 FY26, while revenue from operations increased 60.7% to Rs 1,827.2 crore from Rs 1,136.8 crore. The difference in growth rates reduced the margin to 14.3% from 17.6%.

Management attributed about 150 basis points of the quarterly margin pressure to higher copper costs and 120 basis points to higher direct and indirect manpower costs, including employee stock option plan, or ESOP, costs. PVC costs also affected the quarter. Multilink reduced the reported margin by about 38 basis points because its EBITDA margin was 10.4%, below the original business's 14.7% margin.

The margin also fell from 15.1% in Q1 FY27 to 14.3% in Q2 FY27. Revenue rose 26.5% quarter on quarter from Rs 1,446.4 crore, but EBITDA increased 19.9% from Rs 218.4 crore. This 80-basis-point sequential decline shows that the cost items identified by management remained relevant even as quarterly sales expanded.

How much did Multilink contribute to Dhoot Transmission's Q2 results?

Multilink contributed Rs 161.5 crore of Q2 FY27 revenue and Rs 16.8 crore of EBITDA to Dhoot Transmission, producing a 10.4% EBITDA margin. The business excluding Multilink recorded Rs 1,665.6 crore of revenue and Rs 245.0 crore of EBITDA, with a 14.7% margin. Multilink therefore added sales but diluted the consolidated margin relative to the original business.

The original business nevertheless grew 47% year on year in Q2 FY27, compared with the presentation's industry retail growth reference of about 20%. Its EBITDA margin, however, declined from 17.5% in Q2 FY26 to 14.7% in Q2 FY27. That comparison indicates that the margin movement was not solely due to the acquired Multilink operations.

Management said that excluding ESOP expense, the Q2 EBITDA margin would have been 48 basis points higher. It also said adjusted organic EBITDA margin would have been 15.2%. These disclosures isolate part of the cost effect, while the presentation continues to identify copper, PVC and manpower costs as contributors to the reported 14.3% margin.

What did Dhoot Transmission's H1 FY27 results show?

Dhoot Transmission's first-half financial year 2027, or H1 FY27, revenue from operations increased 55.7% to Rs 3,273.6 crore, while EBITDA rose 29.4% to Rs 480.2 crore. EBITDA margin declined 290 basis points to 14.7% from 17.6% in H1 FY26, extending the direction of Q2 margin pressure across the first half.

Management attributed about 120 basis points of the H1 margin decline to copper and 130 basis points to direct and indirect manpower costs, including ESOPs. It also cited higher PVC and electronics costs. Multilink accounted for roughly 30 basis points of the H1 reduction, generating Rs 188.5 crore of revenue and Rs 19.7 crore of EBITDA at a 10.4% margin.

Revenue composition changed during H1 FY27. Wiring harness revenue grew 43%, while battery and electronics revenue grew 98%, according to the presentation. Electric-vehicle revenue represented 31% of Q2 FY27 revenue, compared with 24% in FY26, although Dhoot Transmission did not disclose a separate EBITDA margin for its electric-vehicle sales.

How did margin pressure affect Dhoot Transmission's profit?

Dhoot Transmission's reported profit after tax, or PAT, was Rs 117.8 crore in Q2 FY27, down 0.3% from Rs 118.2 crore a year earlier, despite profit before tax rising 30.6% to Rs 211.6 crore. Exceptional items rose to Rs 54.8 crore from Rs 7.3 crore, while depreciation and amortisation increased 58.4% to Rs 50.5 crore.

Adjusted PAT rose 30.4% to Rs 161.5 crore from Rs 123.8 crore after adding back exceptional items and their tax impact, but adjusted PAT margin fell to 8.8% from 10.9%. The presentation identifies Rs 45 crore of management fees and Rs 9.7 crore of initial public offering expenses charged to the statement of profit and loss among Q2 one-off expenses.

For H1 FY27, reported PAT increased 16.8% to Rs 250.5 crore and adjusted PAT increased 33.4% to Rs 296.4 crore. Management said adjusted PAT growth was lower than EBITDA growth in the half because depreciation and amortisation rose. H1 depreciation and amortisation was Rs 90.1 crore, compared with Rs 56.9 crore in H1 FY26.

What balance-sheet changes accompanied Dhoot Transmission's results?

Dhoot Transmission reported net cash excluding leases of Rs 903.7 crore at September 2026, compared with Rs 254.4 crore at March 2026. Borrowings declined to Rs 223.8 crore from Rs 841.4 crore, while cash and bank balances increased to Rs 1,127.5 crore from Rs 1,095.8 crore. The H1 cash-flow extract included Rs 1,400 crore of initial public offering proceeds and Rs 617.4 crore of net borrowings repaid.

Trade working capital increased by Rs 226.3 crore to Rs 1,096.4 crore, and trade working-capital days increased to 61 from 55. The H1 extract reported operating cash flow of Rs 40.2 crore, capital expenditure of Rs 292.9 crore and Rs 421.2 crore spent on the Multilink acquisition. Dhoot Transmission notes that these cash-flow movements are derived from balance-sheet changes rather than a statutory cash-flow statement.

Conclusion

Dhoot Transmission combined rapid sales growth with lower operating profitability in Q2 and H1 FY27. The company grew Q2 revenue by 60.7% and H1 revenue by 55.7%, but consolidated EBITDA margins fell as copper, PVC, manpower and ESOP costs increased and Multilink operated at a 10.4% margin below the original business's margin.

The next results will show whether the unresolved cost pressures on copper, PVC and manpower continue to affect profitability, and whether Multilink's margin changes from its disclosed 10.4% level. Trade working-capital days are also a disclosed item to watch after they increased by six days to 61 at September 2026.