IRCON H1 FY27 profit falls 36% despite 12.3% revenue growth

IRCON reported consolidated profit after tax of Rs 192.4 crore in H1 FY27, down 36.0% from H1 FY26, although operating revenue rose 12.3% to Rs 4,227.5 crore. A Rs 62.5 crore fall in other income, Rs 61.3 crore increase in finance cost, higher depreciation and a larger tax charge outweighed growth in core operating earnings.

Why did IRCON’s H1 FY27 profit fall despite revenue growth?

IRCON’s H1 FY27 profit fell because higher project revenue and core earnings did not compensate for reduced other income and higher costs below the core operating line. Operating revenue rose by Rs 464.5 crore from Rs 3,763.0 crore in H1 FY26 to Rs 4,227.5 crore, while core earnings before interest, tax, depreciation and amortisation, or core EBITDA, increased by Rs 39.8 crore to Rs 419.2 crore.

Expenses excluding depreciation and finance cost increased 10.6% to Rs 3,783.8 crore, below the 12.3% rise in operating revenue. However, core EBITDA margin declined by 16 basis points to 9.9% from 10.1%; one basis point is one-hundredth of a percentage point. The revenue increase therefore produced more core EBITDA, but at a slightly lower margin.

Other income declined 25.9% to Rs 179.0 crore from Rs 241.5 crore, a Rs 62.5 crore reduction that exceeded the gain in core EBITDA. Consequently, EBITDA fell 3.7% to Rs 598.1 crore from Rs 620.9 crore. EBITDA margin decreased by 193 basis points to 13.6% from 15.5%.

How did finance cost and depreciation affect IRCON’s earnings?

IRCON’s finance cost increased 38.4% to Rs 221.1 crore in H1 FY27 from Rs 159.8 crore in H1 FY26. The Rs 61.3 crore increase was larger than the Rs 39.8 crore rise in core EBITDA. Depreciation increased 17.4%, or Rs 13.4 crore, to Rs 90.6 crore over the same period.

The combined Rs 74.7 crore increase in finance cost and depreciation, alongside the Rs 62.5 crore reduction in other income, contributed to a Rs 97.6 crore fall in profit before tax to Rs 286.4 crore. Profit-before-tax margin narrowed to 6.5% from 9.6%, a decline of 309 basis points.

The presentation does not identify the borrowings, instruments or transactions behind finance cost of Rs 221.1 crore. It reports non-current financial liabilities of Rs 6,379 crore in H1 FY27, compared with Rs 5,643 crore in H1 FY26, while current financial liabilities were Rs 3,940 crore versus Rs 3,812 crore.

What happened to IRCON’s H1 FY27 margins and tax expense?

IRCON’s margins declined at every reported profitability stage in H1 FY27. Core EBITDA margin was 9.9%, EBITDA margin was 13.6%, profit-before-tax margin was 6.5%, and profit-after-tax margin was 4.4%, compared with 10.1%, 15.5%, 9.6% and 7.5%, respectively, in H1 FY26.

The 314-basis-point decline in profit-after-tax margin was the largest movement among these measures. The 193-basis-point EBITDA-margin decline coincided with lower other income, while the subsequent fall in profit-before-tax margin occurred alongside higher finance cost and depreciation.

Tax expense rose 12.8% to Rs 94.0 crore from Rs 83.4 crore, despite the 25.4% reduction in profit before tax. After tax, profit after tax fell by Rs 108.2 crore to Rs 192.4 crore. Earnings per share, or EPS, declined 35.4% to Rs 2.08 from Rs 3.22; the presentation states a face value of Rs 2 per share.

Did IRCON’s Q2 FY27 results improve from Q1 FY27?

IRCON’s Q2 FY27 results improved sequentially in revenue and profit, although profit remained below the year-earlier quarter. Operating revenue rose 16.2% quarter on quarter to Rs 2,271.7 crore from Rs 1,955.8 crore in Q1 FY27, while profit after tax increased 9.0% to Rs 100.3 crore from Rs 92.0 crore.

Core EBITDA rose 18.6% quarter on quarter to Rs 227.4 crore, and core EBITDA margin increased 20 basis points to 10.0%. Other income rose 6.0% to Rs 92.1 crore and EBITDA increased 14.6% to Rs 319.5 crore, but finance cost also rose 6.7% to Rs 114.1 crore.

Compared with Q2 FY26, operating revenue increased 14.9% from Rs 1,976.8 crore and core EBITDA rose 40.7% from Rs 161.6 crore. Yet other income declined 32.0% from Rs 135.4 crore, finance cost increased 35.0% from Rs 84.5 crore, and tax rose 64.9% from Rs 35.9 crore. Q2 FY27 profit after tax was therefore 26.5% below Rs 136.5 crore in Q2 FY26, while the profit-after-tax margin was 4.2% versus 6.5%.

Conclusion

IRCON’s H1 FY27 performance showed that 12.3% operating-revenue growth and a 10.5% increase in core EBITDA did not translate into higher reported earnings. Lower other income, higher finance cost and depreciation, and a 12.8% increase in tax expense reduced profit after tax by 36.0% to Rs 192.4 crore and narrowed the net margin to 4.4% from 7.5%.

The next results will indicate whether the Q2 FY27 sequential rise in operating revenue to Rs 2,271.7 crore and profit after tax to Rs 100.3 crore continues. The supplied presentation provides no forward target for revenue, other income, finance cost or profit, leaving the direction of those items unresolved.