INOX India Q2 revenue rose 27%, EBITDA margin fell 300 bp

INOX India reported Q2 FY27 revenue from operations of Rs 456 crore, up 27.4% year on year, while EBITDA margin including other income fell 300 basis points to 21.3% from 24.3%. INOXCVA attributed the slower profit growth to project mix, volume-focused pricing and higher logistics costs amid global geopolitical disruptions.

Why did INOXCVA's margin decline despite Q2 revenue growth?

INOXCVA's EBITDA, or earnings before interest, tax, depreciation and amortisation, increased 10.8% year on year to Rs 100 crore in Q2 FY27, substantially slower than the 26.6% rise in total income to Rs 467 crore. EBITDA margin including other income therefore declined to 21.3% from 24.3% in Q2 FY26, while margin measured against revenue from operations fell to 19.4% from 22.0%.

The presentation said manufacturing costs vary by the orders executed in each quarter, including standard, non-standard and service-related work. It also cited aggressive pricing aimed at increasing volume and the absorption of higher logistics costs caused by geopolitical disruptions. Total expenses including materials rose 31.7% to Rs 368 crore in Q2 FY27, compared with total-income growth of 26.6%.

INOXCVA's profit after tax rose 7.8% to Rs 66 crore, below both revenue and EBITDA growth, and its profit-after-tax margin declined to 14.2% from 16.7%. Depreciation increased 29.5% to Rs 10 crore, which the presentation linked to capitalisation of a Cryo-Non-Cryo tank manufacturing facility at Savli and leased trailers in Brazil during the second half of the prior year.

Which costs increased most for INOXCVA in Q2 FY27?

INOXCVA's material cost including work in progress was Rs 201 crore in Q2 FY27, or 43.0% of total income, compared with Rs 150 crore, or 40.5%, in Q2 FY26. The ratio was also higher than 37.8% in Q1 FY27, reflecting the cost profile of work executed during the quarter.

The presentation noted that the H1 FY27 material-cost ratio was 40.6%, below the 42.7% reported for FY26. That comparison indicates that the quarterly increase did not extend to the first-half figure versus the full prior year, while the company continued to caution that order mix can change costs between quarters.

Other expenses increased 30.7% year on year to Rs 125 crore and represented 26.6% of total income, up from 25.8% in Q2 FY26. INOXCVA said the rise was largely due to logistics costs and sales commissions associated with large tanks dispatched to the Bahamas and aerospace dispatches during Q2 FY27. Employee benefit expense rose 23.4% to Rs 43 crore, but declined as a share of total income to 9.1% from 9.3%.

How did INOXCVA's revenue mix change in Q2 FY27?

INOXCVA's Industrial Gas, or IG, business led the change in quarterly revenue mix, rising to Rs 285 crore in Q2 FY27 from Rs 212 crore in Q2 FY26. Its share of consolidated revenue increased to 61% from 57%, making IG the largest contributor to the Rs 98 crore increase in total income.

Liquefied natural gas, or LNG, revenue declined to Rs 71 crore from Rs 93 crore, reducing its quarterly share to 15% from 25%. Cryo-Scientific revenue increased to Rs 77 crore from Rs 49 crore and represented 17% of revenue, while Others, which includes Keg, rose to Rs 34 crore from Rs 15 crore and accounted for 7%.

The mix shifted sequentially as well: IG revenue was Rs 202 crore in Q1 FY27 before reaching Rs 285 crore in Q2 FY27, while LNG fell from Rs 84 crore to Rs 71 crore. The presentation does not assign a separate margin to each segment, but identifies the type of orders executed as a factor behind quarter-to-quarter cost variation.

What do orders and exports indicate for INOXCVA?

INOXCVA received orders worth Rs 1,028 crore in Q2 FY27, compared with Rs 374 crore in Q2 FY26. IG accounted for Rs 792 crore of Q2 FY27 bookings, LNG contributed Rs 161 crore, Cryo-Scientific contributed Rs 55 crore and Others contributed Rs 20 crore.

Export orders totalled Rs 768 crore, or 75% of Q2 FY27 bookings, versus Rs 218 crore, or 58%, a year earlier. Domestic orders were Rs 260 crore, or 25%, compared with Rs 156 crore, or 42%, in Q2 FY26, showing that the increase in quarterly orders was concentrated in exports.

The order backlog reached Rs 2,268 crore at Q2 FY27, up from Rs 1,485 crore a year earlier and Rs 1,686 crore in Q1 FY27. IG represented Rs 1,457 crore, or 64%, of backlog, followed by LNG at Rs 514 crore, or 23%, and Cryo-Scientific at Rs 284 crore, or 12%. Export backlog was Rs 1,628 crore, equal to 72% of the total, compared with 63% in Q2 FY26.

How did INOXCVA perform in H1 FY27?

INOXCVA reported H1 FY27 total income of Rs 849 crore, up 17.7% from Rs 721 crore in H1 FY26, while EBITDA increased 6.2% to Rs 189 crore. EBITDA margin including other income was 22.3%, down from 24.7% a year earlier, extending the margin decline seen in Q2 FY27.

H1 FY27 profit after tax rose 3.6% to Rs 127 crore from Rs 122 crore, while the profit-after-tax margin declined to 14.9% from 17.0%. Material cost including work in progress amounted to Rs 345 crore, or 40.6% of total income, and other expenses were Rs 230 crore, or 27.1%.

Order inflow in H1 FY27 was Rs 1,560 crore, up 97.7% from Rs 789 crore in H1 FY26. IG orders rose 194.3% to Rs 1,177 crore and LNG orders increased 48.9% to Rs 244 crore, whereas Cryo-Scientific orders declined 47.3% to Rs 108 crore. The order composition therefore changed alongside the growth in the overall backlog.

Conclusion

INOXCVA's Q2 FY27 results show that revenue growth did not translate at the same pace into operating profit or net profit. Total income rose 26.6% to Rs 467 crore, but EBITDA rose 10.8% to Rs 100 crore and profit after tax rose 7.8% to Rs 66 crore, as material costs, logistics expenses, commissions and depreciation increased.

What to watch next is the conversion and cost profile of the Rs 2,268 crore order backlog, particularly the Rs 1,457 crore IG component and 72% export share. The presentation says profitability depends on the standard, non-standard and service-related orders executed in each quarter and should be assessed over a longer period; it provides no future margin target.