ideaForge Q2 profit turns positive as revenue rises 124%

ideaForge reported Rs 6.46 crore profit for the period in Q2 FY27, reversing a Rs 19.62 crore loss a year earlier, as revenue from operations rose 124% to Rs 91.29 crore and earnings before interest, tax, depreciation and amortisation (EBITDA) margin reached 25.4%.

How did ideaForge return to profit in Q2 FY27?

ideaForge returned to profit because revenue, gross profit and EBITDA increased from both Q2 FY26 and Q1 FY27. Revenue reached Rs 91.29 crore, compared with Rs 40.76 crore in Q2 FY26 and Rs 68.59 crore in Q1 FY27. Gross profit rose 143% year on year to Rs 49.57 crore, while gross margin increased to 54.3% from 50.0% a year earlier and 49.0% in the preceding quarter.

EBITDA was Rs 23.23 crore, compared with a Rs 7.99 crore loss in Q2 FY26 and profit of Rs 4.28 crore in Q1 FY27. The EBITDA margin therefore moved from negative 19.6% in Q2 FY26 and 6.2% in Q1 FY27 to 25.4% in Q2 FY27. Depreciation and amortisation expense was Rs 14.75 crore, leaving earnings before interest and tax of Rs 8.48 crore, versus a Rs 18.54 crore loss a year earlier.

At the bottom line, ideaForge reported a 7.1% profit margin in Q2 FY27 after negative margins of 48.1% in Q2 FY26 and 3.8% in Q1 FY27. Profit before tax was Rs 7.44 crore after finance costs of Rs 1.04 crore, compared with a Rs 19.46 crore loss before tax in Q2 FY26. Total tax expense was Rs 0.99 crore in the latest quarter.

What drove ideaForge's Q2 FY27 revenue mix and margins?

ideaForge's Q2 FY27 revenue mix was led by defence, which represented 72%, while civil represented 28%. Defence had a lower 67% share in H1 FY27, with civil contributing 33% over the half year. The presentation does not identify the products, contracts or customers behind the segment mix.

Cost of materials consumed was Rs 48.12 crore in Q2 FY27, up from Rs 26.11 crore in Q2 FY26. Changes in inventories of finished goods and work in progress were negative Rs 6.40 crore, compared with negative Rs 4.85 crore a year earlier. Together with revenue of Rs 91.29 crore, these reported movements resulted in gross profit of Rs 49.57 crore.

Employee benefits expense increased to Rs 16.58 crore from Rs 15.07 crore in Q2 FY26, while other expenses declined to Rs 16.03 crore from Rs 16.60 crore. Other income was Rs 6.27 crore, compared with Rs 3.29 crore a year earlier and Rs 1.95 crore in Q1 FY27. The presentation does not provide a further breakdown of other income.

What does ideaForge's H1 FY27 performance show?

ideaForge reported Rs 3.87 crore profit for H1 FY27, reversing a Rs 43.17 crore loss in H1 FY26, as revenue rose 199% to Rs 159.87 crore. EBITDA turned to Rs 27.51 crore from a Rs 23.13 crore loss, and EBITDA margin moved to 17.2% from negative 43.2%.

Gross profit rose to Rs 83.19 crore in H1 FY27 from Rs 28.28 crore in H1 FY26. However, the H1 gross margin was 52.0%, compared with 52.8% a year earlier. Q2's 54.3% gross margin was above the H1 rate because Q1 FY27 gross margin was 49.0%.

The first-half profit followed a reported tax credit of Rs 8.39 crore. Loss before tax narrowed to Rs 4.52 crore from Rs 44.75 crore in H1 FY26, while depreciation and amortisation expense increased to Rs 28.95 crore from Rs 20.33 crore. As a result, earnings before interest and tax remained a Rs 1.44 crore loss despite positive first-half EBITDA.

What do ideaForge's order book and balance sheet show?

ideaForge ended Q2 FY27 with an order book position of Rs 202.20 crore, down from Rs 256.80 crore at the end of Q1 FY27 and Rs 314.20 crore at Q4 FY26. The Q2 FY27 position was still above Rs 164.00 crore at the end of Q2 FY26. The presentation does not state the timing of order execution or the order book's civil and defence split.

Total equity rose to Rs 1,095.13 crore at 30 September 2026 from Rs 599.04 crore at 31 March 2026, while total liabilities declined to Rs 94.61 crore from Rs 199.68 crore. Current borrowings were nil at 30 September 2026, compared with Rs 72.13 crore at 31 March 2026. Other equity increased to Rs 1,045.42 crore from Rs 555.77 crore.

Current assets increased to Rs 845.44 crore at 30 September 2026 from Rs 483.25 crore at 31 March 2026. Inventories were Rs 155.00 crore and trade receivables were Rs 161.05 crore. The balance sheet recorded Rs 86.65 crore of cash and cash equivalents, plus Rs 102.64 crore of bank balances other than cash equivalents.

Why was ideaForge's operating cash flow negative in H1 FY27?

ideaForge reported net cash used in operating activities of Rs 78.04 crore for the six months ended 30 September 2026 because working capital used Rs 99.47 crore. Operating profit before working-capital changes was Rs 22.07 crore, but cash generated from operations was negative Rs 77.39 crore before direct taxes paid.

The operating cash outflow was greater than the Rs 30.28 crore outflow in the six months ended 30 September 2025. Direct taxes paid were Rs 0.64 crore in H1 FY27, compared with Rs 0.39 crore in the previous-year period. The cash-flow statement therefore shows that the Rs 3.87 crore H1 FY27 profit had not converted into positive operating cash flow during the half year.

Investing activities used Rs 278.31 crore in H1 FY27, while financing activities generated Rs 409.51 crore. The cash-flow statement reported Rs 83.42 crore of cash and cash equivalents at 30 September 2026, compared with Rs 32.15 crore a year earlier. The balance sheet separately recorded Rs 86.65 crore at the same date, and the presentation does not reconcile the two amounts.

Conclusion

ideaForge's Q2 FY27 result marked a reported earnings turnaround, with Rs 91.29 crore of revenue, Rs 23.23 crore of EBITDA and Rs 6.46 crore of profit for the period. The H1 FY27 result also returned to profit, although the 52.0% H1 gross margin was below the 52.8% recorded in H1 FY26 and earnings before interest and tax remained negative Rs 1.44 crore.

The next results will show how much of the Rs 202.20 crore Q2 FY27 order book converts into revenue and whether working-capital movements improve from the Rs 99.47 crore H1 outflow. The presentation also leaves unresolved the difference between Rs 83.42 crore in period-end cash and cash equivalents in the cash-flow statement and Rs 86.65 crore on the balance sheet.