GSP Crop Q2 revenue grows 19.5% as EBITDA margin falls to 13.2%

GSP Crop’s Q2 FY27 revenue rose 19.5% year on year to Rs 558.4 crore, but EBITDA fell 21.0% to Rs 73.6 crore as its EBITDA margin narrowed to 13.2% from 19.9%. Higher raw-material costs, supply-related challenges and lower sales of high-margin products constrained earnings despite improved realisations across key products.

Why did GSP Crop's Q2 profit decline despite revenue growth?

GSP Crop’s Q2 FY27 profit declined because costs grew faster than revenue, limiting gross-profit growth to 2.6% even as income from operations increased by Rs 91.1 crore from Q2 FY26. Total raw-material expenses rose to Rs 365.2 crore from Rs 279 crore, while gross profit increased to Rs 193.2 crore from Rs 188.3 crore. GSP Crop attributed the year-on-year margin pressure to raw-material procurement costs, supply-related challenges and lower sales of high-margin products.

The components of raw-material expenses also increased in Q2 FY27. Cost of materials consumed rose to Rs 316.5 crore from Rs 269.6 crore, purchases of stock in trade rose to Rs 4.2 crore from Rs 1.6 crore, and changes in inventory were Rs 44.6 crore compared with Rs 7.8 crore. These movements resulted in raw-material expenses rising faster than income from operations.

Employee cost increased to Rs 29.6 crore in Q2 FY27 from Rs 27.4 crore a year earlier, while other expenses increased to Rs 90 crore from Rs 67.7 crore. These expense movements reduced EBITDA to Rs 73.6 crore from Rs 93.2 crore despite higher sales. Gross-profit margin fell by 5.7 percentage points to 34.6%, showing that the sales increase did not translate into proportionate gross-profit growth.

How did GSP Crop's margins change in Q2 FY27?

GSP Crop’s EBITDA margin fell to 13.2% in Q2 FY27 from 19.9% in Q2 FY26, while its profit-after-tax margin declined to 8.0% from 12.5%. Gross-profit margin also moved down to 34.6% from 40.3%, showing that pressure began before employee and other operating expenses were deducted. GSP Crop said lower sales of high-margin products were among the factors affecting the year-on-year result.

Below EBITDA, depreciation increased to Rs 10.1 crore from Rs 7.1 crore, while other income rose to Rs 4.4 crore from Rs 0.8 crore. Earnings before interest and tax declined 21.7% to Rs 67.9 crore, and profit before tax declined 22.4% to Rs 60.4 crore. Interest expense fell to Rs 7.5 crore from Rs 8.9 crore, but this reduction did not offset the decline in operating earnings.

Profit after tax was Rs 44.6 crore in Q2 FY27 compared with Rs 58.5 crore in Q2 FY26, while tax expense declined to Rs 15.8 crore from Rs 19.4 crore. The lower tax charge was smaller than the Rs 17.5 crore reduction in profit before tax. No exceptional items were reported in either Q2 FY27 or Q2 FY26.

What changed between Q1 FY27 and Q2 FY27?

GSP Crop’s Q2 FY27 operating performance improved sequentially, with revenue increasing 44.7% from Rs 386 crore in Q1 FY27 and EBITDA increasing 73.0% from Rs 42.5 crore. EBITDA margin improved to 13.2% from 11.0% in Q1 FY27, which GSP Crop attributed to cost optimisation. The sequential recovery still left Q2 margin below the 19.9% reported in Q2 FY26.

Gross profit increased 35.7% quarter on quarter to Rs 193.2 crore from Rs 142.4 crore, while total raw-material expenses rose to Rs 365.2 crore from Rs 243.6 crore. Changes in inventory moved to Rs 44.6 crore in Q2 FY27 from Rs (54.1) crore in Q1 FY27. The shift in this line accompanied the quarter-on-quarter increase in revenue and raw-material expenses.

Profit after tax rose to Rs 44.6 crore from Rs 26.4 crore in Q1 FY27. Other income declined to Rs 4.4 crore from Rs 8.3 crore, while interest expense increased to Rs 7.5 crore from Rs 6.8 crore. Despite those movements below EBITDA, the higher operating profit lifted profit before tax to Rs 60.4 crore from Rs 35.4 crore.

What do GSP Crop's H1 results and cash flow show?

GSP Crop’s H1 FY27 revenue increased 11.9% to Rs 944.4 crore from Rs 844.3 crore in H1 FY26, but EBITDA declined 14.3% to Rs 116.1 crore from Rs 135.5 crore. H1 EBITDA margin was 12.3%, compared with 16.1% a year earlier, while gross-profit margin declined to 35.5% from 37.7%. Profit after tax fell to Rs 71 crore from Rs 81.1 crore, and its margin decreased to 7.5% from 9.6%.

H1 FY27 raw-material expenses were Rs 608.8 crore, compared with Rs 526.1 crore in H1 FY26, while gross profit rose to Rs 335.6 crore from Rs 318.1 crore. Employee cost increased to Rs 61.5 crore from Rs 53.2 crore and other expenses rose to Rs 158 crore from Rs 129.4 crore. Operating profit before working-capital changes declined to Rs 118.9 crore from Rs 140.6 crore.

H1 FY27 net cash from operating activities was an outflow of Rs 83.4 crore, compared with an inflow of Rs 26.6 crore in H1 FY26, after working-capital changes of Rs (181) crore versus Rs (91.4) crore. At September 30, 2026, trade receivables were Rs 827.5 crore, up from Rs 552.6 crore at March 31, 2026, while inventories increased to Rs 403.2 crore from Rs 356.2 crore. Cash and cash equivalents decreased to Rs 23.3 crore from Rs 155.3 crore over the same dates.

Conclusion

GSP Crop reported higher Q2 FY27 sales, but the increase in raw-material expenses, employee cost and other expenses constrained gross-profit growth and reduced EBITDA and profit after tax. Revenue grew 19.5% year on year, whereas total raw-material expenses increased from Rs 279 crore to Rs 365.2 crore, contributing to the EBITDA-margin decline from 19.9% to 13.2%. The quarter was better than Q1 FY27 on a sequential margin basis, but it did not restore the prior-year margin level.

The next operating variables to watch are GSP Crop’s stated cost-optimisation efforts, its mix of high-margin products and seasonal crop-protection demand. GSP Crop said El Niño was expected to peak in November, with below-normal rainfall anticipated during October to December that could affect rabi sowing and crop-protection demand. It also disclosed continued research and development on differentiated formulations and patented product introductions, which may affect the product portfolio in subsequent periods.