Hirect Limited Q2 profit falls 81% as EMS loss widens

Hirect Limited reported consolidated net profit of Rs 2.87 crore for the quarter ended September 30, 2026, down about 81% from Rs 14.724 crore a year earlier, as the EMS segment recorded a Rs 10.99 crore loss, wider than the Rs 8.483 crore loss in the preceding quarter. Revenue from operations rose to Rs 315.686 crore.

Why did Hirect’s Q2 profit decline despite higher revenue?

Hirect’s September-quarter profit declined because the increase in revenue did not translate into higher operating earnings, with EMS losses widening and Engineering Products segment profit falling sequentially. Revenue from operations increased to Rs 315.686 crore in the quarter ended September 30, 2026, from Rs 227.147 crore a year earlier and Rs 258.448 crore in the June 2026 quarter.

Profit before exceptional items and tax was Rs 5.037 crore, compared with Rs 19.643 crore in the September 2025 quarter and Rs 8.101 crore in the June 2026 quarter. Hirect reported exceptional items of Rs 2.676 crore in the September quarter, which took profit before tax to Rs 7.713 crore. Current tax was Rs 5.775 crore, while deferred tax was a credit of Rs 0.932 crore, resulting in net profit of Rs 2.87 crore.

Expenses rose to Rs 311.624 crore in the September quarter from Rs 254.674 crore in the June quarter, against the Rs 57.238 crore sequential increase in revenue. Materials consumed were Rs 230.692 crore, employee-benefit expense was Rs 40.116 crore and other expenses were Rs 22.332 crore. Finance costs were Rs 4.576 crore, compared with Rs 4.736 crore in the preceding quarter.

The year-on-year comparison is not fully comparable, according to the filing. Hirect said the September 2025 quarter and half year did not include Elventive France, which was incorporated on September 30, 2025. The company nevertheless reported September 2025 consolidated revenue from operations of Rs 227.147 crore and net profit of Rs 14.724 crore.

How much did Hirect’s EMS segment loss widen?

Hirect’s EMS segment loss widened to Rs 10.99 crore in the September 2026 quarter from Rs 8.483 crore in the June 2026 quarter. The sequential increase in the loss was Rs 2.507 crore, while EMS revenue declined to Rs 21.339 crore from Rs 22.056 crore.

For the half year ended September 30, 2026, EMS reported revenue of Rs 43.395 crore and a segment loss of Rs 19.473 crore. That half-year loss exceeded the Rs 18.856 crore loss reported by EMS for the full year ended March 31, 2026. The segment disclosure does not state the operational reasons, product mix, customer exposure or costs behind the quarterly loss.

EMS segment assets were Rs 58.117 crore at September 30, 2026, up from Rs 52.478 crore at June 30, 2026. The segment’s liabilities and equity were also Rs 58.117 crore at the September date, compared with Rs 52.478 crore at the preceding quarter-end. No September 2025 EMS segment figures are presented in the table.

Which segments offset Hirect’s EMS loss in Q2?

Engineering Products and CTC/PICC/EPICC generated combined segment profit of Rs 27.339 crore in the September quarter, offsetting the Rs 10.99 crore EMS loss before interest, unallocable expenditure and exceptional items. Engineering Products contributed Rs 25.404 crore and CTC/PICC/EPICC contributed Rs 1.935 crore.

Engineering Products remained the largest segment by disclosed revenue, reporting Rs 292.341 crore in the September quarter, up from Rs 234.85 crore in June and Rs 227.147 crore a year earlier. Its segment profit, however, declined to Rs 25.404 crore from Rs 27.661 crore in the June quarter. Its September 2026 segment assets stood at Rs 486.158 crore.

CTC/PICC/EPICC revenue increased to Rs 58.879 crore in the September quarter from Rs 39.506 crore in June, while segment profit rose to Rs 1.935 crore from Rs 1.284 crore. CTC refers to continuously transposed conductor. The filing does not expand PICC or EPICC.

Total segment profit consequently fell by Rs 4.113 crore sequentially to Rs 16.349 crore. Interest was Rs 5.159 crore and other unallocable expenditure was Rs 6.153 crore in the September quarter. These items, together with the reported exceptional-item treatment of Rs 2.676 crore, reconciled to profit before tax of Rs 7.713 crore.

Why is the CTC/PICC/EPICC comparison limited?

Hirect identifies CTC/PICC/EPICC as a separate reportable segment from November 3, 2025, so its September 2026 performance cannot be compared with a corresponding September 2025 segment result. The company said the continuously transposed conductor plant’s manufacturing operations were identified and managed as a separate business line during the year ended March 31, 2026.

The filing says manufacturing operations of this segment commenced during the current period and therefore does not present corresponding prior-period segment information. For the year ended March 31, 2026, CTC/PICC/EPICC reported revenue of Rs 20.751 crore and a segment loss of Rs 1.436 crore. In the half year ended September 30, 2026, it reported Rs 98.385 crore of revenue and Rs 3.219 crore of segment profit.

Intersegment revenue was Rs 56.873 crore in the September quarter, up from Rs 37.964 crore in June. Total segment revenue was Rs 372.559 crore in September, but eliminating intersegment revenue produced sales and income from operations of Rs 315.686 crore. This reconciliation explains why the total of the segment revenue figures exceeds consolidated revenue from operations.

What do Hirect’s half-year earnings and cash flows show?

Hirect’s half-year revenue from operations rose to Rs 574.134 crore for the period ended September 30, 2026, from Rs 441.921 crore a year earlier, but net profit fell to Rs 9.371 crore from Rs 27.489 crore. Profit before exceptional items and tax was Rs 13.138 crore, compared with Rs 37.747 crore in the prior-year half year.

The half-year segment result was Rs 36.811 crore, below Rs 44.935 crore in the previous corresponding period. EMS recorded a Rs 19.473 crore loss, while Engineering Products generated Rs 53.065 crore of segment profit. CTC/PICC/EPICC added Rs 3.219 crore of profit, although the company provides no comparable prior-period CTC segment figure.

Net cash used in operating activities was Rs 14.731 crore in the half year ended September 30, 2026, compared with net cash from operations of Rs 63.315 crore a year earlier. The cash-flow statement recorded a Rs 35.941 crore inventory outflow, a Rs 13.804 crore trade-payables outflow and a Rs 23.332 crore outflow in other financial liabilities.

Cash and cash equivalents in the cash-flow statement increased to Rs 64.163 crore at September 30, 2026, from Rs 4.984 crore at the opening of the half year. Financing cash flow included Rs 99.9 crore of net proceeds from a preferential issue, while borrowings repayments were Rs 10.928 crore and interest paid was Rs 9.378 crore.

Conclusion

Hirect’s September-quarter results show that revenue growth to Rs 315.686 crore was accompanied by a substantial reduction in reported profit to Rs 2.87 crore. The wider EMS loss, lower sequential Engineering Products profit and a decline in total segment profit to Rs 16.349 crore explain the movement more directly than revenue growth alone.

The next result announcement will show whether EMS can improve from its September-quarter revenue of Rs 21.339 crore and loss of Rs 10.99 crore. It will also clarify whether Engineering Products can sustain revenue above Rs 292.341 crore while recovering from the sequential decline in segment profit, and whether operating cash flow improves after the Rs 14.731 crore half-year outflow.