Gulshan Polyols H1 FY27 PAT more than doubled to Rs 92 crore

Gulshan Polyols Limited more than doubled profit after tax to Rs 92 crore in H1 FY27, up 222% year on year, as EBITDA margin rose 558 basis points to 12.7% and total operating expenses increased only 4% against 11% total-income growth. Lower depreciation and finance costs further lifted pre-tax profit.

How did Gulshan Polyols perform in H1 FY27?

Gulshan Polyols reported profit after tax, or PAT, of Rs 92 crore for H1 FY27, compared with Rs 29 crore in H1 FY26. The Rs 63 crore increase came as profit before tax rose 198% to Rs 126 crore from Rs 42 crore, while PAT margin expanded to 7.3% from 2.5%.

Revenue from operations increased 11% to Rs 1,255 crore in H1 FY27 from Rs 1,135 crore a year earlier. Including other income, total income reached Rs 1,260 crore, also 11% higher than Rs 1,137 crore in H1 FY26. Other income rose to Rs 5 crore from Rs 2 crore, contributing a smaller part of the Rs 123 crore increase in total income.

What drove Gulshan Polyols' margin expansion?

Gulshan Polyols' earnings acceleration was driven by operating expenses rising more slowly than income: total operating expense increased 4% to Rs 1,101 crore, while total income increased 11% to Rs 1,260 crore. Earnings before interest, tax, depreciation and amortization, or EBITDA, consequently climbed 97% to Rs 159 crore from Rs 81 crore.

Cost of materials consumed increased 1% to Rs 792 crore in H1 FY27 from Rs 788 crore in H1 FY26, despite the Rs 120 crore rise in revenue from operations. Employee benefit expense rose 24% to Rs 28 crore, and other expenses increased 14% to Rs 281 crore. Together, these movements produced a Rs 78 crore rise in EBITDA and lifted the EBITDA margin from 7.1% to 12.7%.

The pattern continued in Q2 FY27, although at a lower margin than the first half: revenue from operations rose 14% to Rs 615 crore and EBITDA increased 63% to Rs 69 crore. Q2 EBITDA margin was 11.2%, up 338 basis points from 7.8% in Q2 FY26 but below the 12.7% reported for H1 FY27.

How did lower financing and depreciation costs affect profit?

Gulshan Polyols' lower depreciation and finance costs added to the operating-profit improvement in H1 FY27. Depreciation and amortization declined 5% to Rs 21 crore from Rs 22 crore, while finance cost fell 23% to Rs 13 crore from Rs 16 crore, helping profit before tax increase by Rs 84 crore to Rs 126 crore.

Tax expense rose 146% to Rs 33 crore from Rs 14 crore as pre-tax profit expanded, but this did not offset the operating and financing gains. PAT therefore rose 222% to Rs 92 crore. In Q2 FY27, finance cost was Rs 6 crore, 28% below Rs 8 crore in Q2 FY26, while depreciation and amortization declined 9% to Rs 10 crore.

The half-year outcome followed an improvement in FY26, when EBITDA rose 131% to Rs 232 crore and PAT increased 334% to Rs 107 crore. EBITDA margin had already expanded to 10.0% in FY26 from 5.0% in FY25, while PAT margin rose to 4.6% from 1.2%; H1 FY27's 12.7% EBITDA margin and 7.3% PAT margin were above those FY26 levels.

What does Gulshan Polyols' balance sheet show at H1 FY27?

Gulshan Polyols reported equity including reserves and surplus of Rs 802 crore at H1 FY27, up from Rs 719 crore at FY26. Total liabilities and assets were each Rs 1,389 crore at H1 FY27, compared with Rs 1,304 crore at FY26, reflecting a Rs 85 crore increase in the balance-sheet total.

Long-term borrowings fell to Rs 85 crore at H1 FY27 from Rs 100 crore at FY26, and short-term borrowings declined to Rs 148 crore from Rs 212 crore. The combined reduction was Rs 79 crore, while trade payables increased to Rs 173 crore from Rs 159 crore and current tax liability rose to Rs 31 crore from Rs 2 crore.

On the asset side, inventories increased to Rs 287 crore at H1 FY27 from Rs 223 crore at FY26, while trade receivables were broadly steady at Rs 207 crore versus Rs 206 crore. Cash and bank balances increased to Rs 34 crore from Rs 28 crore. Fixed assets including capital work in progress declined to Rs 688 crore from Rs 701 crore.

How much cash did Gulshan Polyols generate and deploy?

Gulshan Polyols generated net cash from operating activities of Rs 119 crore in H1 FY27, against reported profit before tax of Rs 126 crore. Working-capital changes used Rs 15 crore of cash and direct taxes paid were Rs 25 crore, while non-cash and non-operating adjustments added Rs 33 crore.

The company recorded net investing cash outflow of Rs 11 crore in H1 FY27, including Rs 8 crore for purchases of net fixed assets and Rs 4 crore for net purchases of investments. This was below the Rs 60 crore net investing outflow reported in FY26, when purchases of net fixed assets were Rs 26 crore and net investment purchases were Rs 35 crore.

Net financing cash outflow was Rs 102 crore in H1 FY27, led by Rs 80 crore of borrowing repayment, Rs 13 crore of interest and lease payments, and Rs 9 crore of dividends paid. Net cash increased by Rs 6 crore during the half year, taking closing cash and cash equivalents to Rs 34 crore from opening cash of Rs 28 crore.

Conclusion

Gulshan Polyols' H1 FY27 result shows a widening gap between income growth and expense growth: total income rose 11%, total operating expense rose 4%, and EBITDA rose 97%. The resulting margin expansion, combined with Rs 3 crore lower finance cost and Rs 1 crore lower depreciation and amortization, lifted PAT to Rs 92 crore from Rs 29 crore.

The unresolved issue in the disclosed figures is whether the H1 FY27 EBITDA margin of 12.7% can be sustained after Q2 FY27 recorded 11.2%. The next reported results will also show how the Rs 287 crore inventory balance, Rs 207 crore receivables balance and Rs 80 crore H1 FY27 borrowing repayment develop.