Garg Furnace Q2 FY27 Profit Falls 32.1% Despite Revenue Growth

Garg Furnace Limited reported consolidated net profit of ₹1.9 crore for Q2 FY27, down 32.1% year-on-year, despite a 29.0% rise in revenue from operations to ₹79.6 crore. The September-quarter results show that higher revenue did not translate into higher profit, with the operating margin declining to 4.1% from 4.7% a year earlier.

What did Garg Furnace report for Q2 FY27?

Garg Furnace reported consolidated total income of ₹79.9 crore for the quarter ended September 30, 2026, compared with ₹61.8 crore in Q2 FY26 and ₹59.3 crore in Q1 FY27. Revenue from operations was ₹79.6 crore, while other income was ₹0.2 crore.

Profit before exceptional items and tax was ₹3.3 crore, compared with ₹2.9 crore in the year-earlier quarter and ₹2.5 crore in the preceding quarter. Profit before tax was also ₹3.3 crore. Net profit was ₹1.9 crore, against ₹2.8 crore in Q2 FY26 and ₹1.8 crore in Q1 FY27.

The Board of Directors approved the unaudited standalone and consolidated financial results on November 14, 2026. The reported quarter and half-year period ended September 30, 2026.

Why did profit decline while revenue increased?

Garg Furnace's reported figures show that profit declined even as revenue increased, alongside a contraction in operating margin. The operating margin was 4.1% in Q2 FY27, lower than 4.7% in Q2 FY26 and slightly below 4.2% in Q1 FY27.

Operating profit rose 10.7% year-on-year and 29.2% quarter-on-quarter, according to the results summary. However, revenue expanded faster than operating profit on a year-on-year basis, which is reflected in the lower operating margin.

The available results data does not specify individual cost heads or provide a management explanation for the margin movement. Therefore, the disclosed numbers establish the difference between revenue growth and profit growth, but do not identify a specific cause for the lower consolidated net profit.

How do the standalone and consolidated Q2 figures compare?

Garg Furnace's standalone Q2 FY27 profit after tax was ₹2.9 crore, while consolidated profit after tax was ₹1.9 crore. The standalone total income was ₹68.5 crore, including standalone revenue from operations of ₹68.3 crore.

Standalone expenses for the quarter were ₹65.1 crore, resulting in profit before tax of ₹3.4 crore and profit after tax of ₹2.9 crore. The standalone profit before tax was higher than ₹2.7 crore reported for the same quarter of the previous year.

At the consolidated level, total income was ₹79.9 crore and total expenses were ₹76.5 crore for Q2 FY27. This produced consolidated profit after tax of ₹1.9 crore. Investors should distinguish between the two reporting bases when comparing figures, as the headline quarterly summary is based on consolidated results.

What does the half-year financial position show?

Garg Furnace reported consolidated total income of ₹139.1 crore for the half-year ended September 30, 2026, with total expenses of ₹133.3 crore and profit after tax of ₹3.7 crore. For the same half-year, standalone total income was ₹125.8 crore and standalone profit after tax was ₹4.6 crore.

As of September 30, 2026, total assets on the reported balance sheet stood at ₹145.6 crore. Total equity and liabilities were also ₹145.6 crore, as required under the balance-sheet format.

Cash flow data for the standalone half-year showed net cash used in operating activities of ₹5.3 crore and net cash used in investing activities of ₹9.6 crore. Financing activities generated a net cash inflow of ₹1.9 crore, resulting in a net decline in cash and cash equivalents of ₹3.3 crore.

How could the results matter to investors and operations?

Garg Furnace's Q2 numbers matter because they show a divergence between turnover and earnings. Consolidated revenue rose by ₹17.9 crore from Q2 FY26, while net profit declined by ₹0.9 crore over the same comparison period. The operating-margin decline of 0.6 percentage points provides the clearest disclosed measure of this change.

On a sequential basis, the picture was more favourable. Revenue rose from ₹59.2 crore in Q1 FY27 to ₹79.6 crore in Q2 FY27, and net profit increased from ₹1.8 crore to ₹1.9 crore. Yet the quarter-on-quarter operating margin was marginally lower at 4.1% versus 4.2%.

For shareholders tracking the company, the key disclosed indicators are revenue conversion, profitability at the consolidated level, and cash movement during the half-year. The filing does not provide forecasts, capital-expenditure plans, volume data, or an outlook for the remaining quarters of FY27.

Conclusion

Garg Furnace delivered stronger consolidated revenue in Q2 FY27 but lower year-on-year net profit, as operating margin narrowed to 4.1%. The results also show a distinction between standalone profit of ₹2.9 crore and consolidated profit of ₹1.9 crore, making the reporting basis important when assessing quarterly performance.

The next disclosed reference point is the company's subsequent financial results, where investors can assess whether revenue growth continues and whether the operating margin improves from the Q2 FY27 level. The current filing does not state a specific earnings target or outlook for the rest of FY27.