ISGEC H1 PBT rises 62% as engineering offsets sugar decline

ISGEC Heavy Engineering Ltd reported a 62% year-on-year rise in consolidated profit before tax (PBT) to Rs 155.2 crore in H1 FY27, as total income increased 25% to Rs 3,853.1 crore and growth in its engineering businesses outweighed a 40% decline in Sugar & Ethanol revenue.

Why did ISGEC's H1 PBT increase?

ISGEC's H1 PBT increased as consolidated income rose and the PBT margin improved to 4.0% from 3.1%. Total income increased from Rs 3,070.6 crore in H1 FY26 to Rs 3,853.1 crore in H1 FY27, while PBT rose from Rs 95.6 crore to Rs 155.2 crore. The 0.9-percentage-point margin increase accompanied the 62% increase in PBT.

The presentation reports that Manufacturing of Machinery & Equipment revenue grew 34% year on year in H1 FY27 and Industrial Projects revenue rose 36%. These gains occurred alongside the 62% PBT increase, even as Sugar & Ethanol revenue declined 40%. ISGEC does not provide a segment-level reconciliation of consolidated PBT, so the data show the coincident movement in segment revenue and group profit rather than a quantified PBT contribution from each business.

Which ISGEC segments drove H1 revenue growth?

ISGEC's Industrial Projects and Manufacturing of Machinery & Equipment businesses delivered the reported H1 FY27 revenue growth. Industrial Projects revenue increased by Rs 563.2 crore to Rs 2,124.6 crore, while Manufacturing of Machinery & Equipment revenue rose by Rs 389.9 crore to Rs 1,533 crore. Sugar & Ethanol revenue, by contrast, declined by Rs 189.3 crore to Rs 281.2 crore.

Industrial Projects was ISGEC's largest reported segment in H1 FY27, with revenue of Rs 2,124.6 crore, ahead of Manufacturing of Machinery & Equipment at Rs 1,533 crore and Sugar & Ethanol at Rs 281.2 crore. Industrial Projects grew 36%, marginally faster than the 34% growth in Manufacturing of Machinery & Equipment, while Sugar & Ethanol contracted 40%. The Sugar & Ethanol figures exclude the ethanol plant in the Philippines.

How did ISGEC's segment margins change in H1?

ISGEC's Industrial Projects earnings before interest and tax (EBIT) margin improved in H1 FY27, while the margins in its other two reported segments declined. Industrial Projects EBIT margin rose to 5.4% from 4.6% in H1 FY26. Manufacturing of Machinery & Equipment EBIT margin fell to 12.3% from 14.3%, while Sugar & Ethanol EBIT margin reduced to 1.8% from 2.5%.

The segment figures show differing operating outcomes despite the group PBT margin rising to 4.0% from 3.1%. Manufacturing of Machinery & Equipment retained the highest H1 EBIT margin at 12.3%, although it was 2.0 percentage points below the prior-year level. Industrial Projects added 0.8 percentage points while revenue grew 36%, whereas Sugar & Ethanol's 0.7-percentage-point decline came alongside the 40% revenue contraction to Rs 281.2 crore.

What does ISGEC's Q2 FY27 result indicate?

ISGEC's Q2 FY27 PBT rose 102% year on year to Rs 102.3 crore, compared with a 10% increase in total income to Rs 1,859.6 crore. Its Q2 PBT margin reached 5.5%, up from 3.0% in Q2 FY26 and 2.7% in Q1 FY27. Q2 FY26 PBT was Rs 50.5 crore, while Q1 FY27 PBT was Rs 52.9 crore.

Revenue in both engineering segments was lower in Q2 FY27 than in Q1 FY27 but higher than in Q2 FY26. Manufacturing of Machinery & Equipment recorded Rs 736.4 crore, compared with Rs 796.6 crore in Q1 FY27 and Rs 666.7 crore a year earlier. Industrial Projects reported Rs 1,020.7 crore, versus Rs 1,103.8 crore in Q1 FY27 and Rs 843.7 crore in Q2 FY26.

Sugar & Ethanol revenue was Rs 144.1 crore in Q2 FY27, above Rs 137.1 crore in Q1 FY27 but below Rs 239.1 crore in Q2 FY26. Its Q2 EBIT margin turned positive at 5.2%, compared with negative 2.3% a year earlier and negative 1.9% in Q1 FY27. Manufacturing of Machinery & Equipment reported a 13.5% Q2 EBIT margin, while Industrial Projects reported 5.6%, compared with 11.3% and 5.2%, respectively, in Q1 FY27.

Conclusion

ISGEC's H1 FY27 outcome combined 25% consolidated income growth with a 0.9-percentage-point increase in PBT margin, lifting PBT to Rs 155.2 crore. Revenue gains of 34% in Manufacturing of Machinery & Equipment and 36% in Industrial Projects coincided with a 40% Sugar & Ethanol decline, while Industrial Projects was the only reported segment to improve its H1 EBIT margin.

The next item to watch is whether ISGEC's international opportunities contribute to further engineering revenue growth. Standalone exports rose 31% to Rs 557 crore in H1 FY27 and represented 18% of total income, while 23% of the order book was international. Management also cited healthy enquiries from Latin America, Africa and Southeast Asia, and said a weaker rupee supports export competitiveness.