IST Limited Q2 profit falls 39% despite revenue growth

IST Limited reported consolidated net profit of Rs 17.51 crore for the quarter ended 30 September 2026, down 39% from a year earlier, although revenue from operations rose 26% to Rs 36.11 crore. Lower SEZ segment profit, a Rs 11.02 crore manufacturing loss and lower other income reduced earnings.

Why did IST’s Q2 profit fall despite higher revenue?

IST’s consolidated profit after tax fell to Rs 17.51 crore in the quarter ended 30 September 2026 from Rs 28.63 crore a year earlier because profit before tax, other income and segment results all declined despite higher operating revenue. Revenue from operations increased from Rs 28.69 crore to Rs 36.11 crore over the same comparison.

Profit before tax declined 33% to Rs 25.19 crore from Rs 37.46 crore. Consolidated segment results before finance cost and tax fell to Rs 26.36 crore from Rs 37.88 crore, while finance cost increased to Rs 1.59 crore from Rs 76.78 lakh. IST also recorded an Rs 41.99 lakh share of profit from its associate, compared with Rs 34.62 lakh in the prior-year quarter.

Other income at the consolidated level was Rs 3.62 crore in Q2, compared with Rs 19.08 crore in the quarter ended 30 September 2025. Total income consequently declined to Rs 39.73 crore from Rs 47.77 crore, even as revenue from operations rose. The filing separately says standalone other income was negative in the September 2026 quarter because of a loss on investments measured at fair value through profit or loss, or FVTPL.

Consolidated expenses rose to Rs 14.96 crore from Rs 10.65 crore. Employee-benefit expense increased to Rs 5.59 crore from Rs 3.69 crore, depreciation and amortisation rose to Rs 1.57 crore from Rs 1.42 crore, and other expenses increased to Rs 4.16 crore from Rs 3.02 crore. Tax expense fell to Rs 7.68 crore from Rs 9.57 crore, but did not offset the lower pre-tax profit.

How did IST’s manufacturing and SEZ segments perform?

IST’s SEZ segment remained the larger contributor to revenue and profit, but its profit before tax and finance cost fell 17% to Rs 37.37 crore from Rs 44.85 crore. SEZ revenue nevertheless increased 19% to Rs 26.61 crore from Rs 22.34 crore in the quarter ended 30 September 2025.

The manufacturing segment reported a loss before tax and finance cost of Rs 11.02 crore, compared with a Rs 6.97 crore loss a year earlier. Manufacturing revenue rose 50% to Rs 9.50 crore from Rs 6.35 crore, meaning the disclosed segment figures show that higher sales did not prevent a wider loss.

The sequential comparison was also weaker for both segments. Manufacturing moved from a Rs 41.37 crore profit before tax and finance cost in the quarter ended 30 June 2026 to a Rs 11.02 crore loss in the September quarter. SEZ profit fell from Rs 59.91 crore to Rs 37.37 crore over that period, even as its revenue increased from Rs 24.43 crore to Rs 26.61 crore.

IST reports manufacturing of high-precision engineering components and assemblies and SEZ operations as its two consolidated reportable segments under Indian Accounting Standard 108. No inter-segment revenue was reported, so manufacturing revenue of Rs 9.50 crore and SEZ revenue of Rs 26.61 crore reconcile to consolidated operating revenue of Rs 36.11 crore.

What do IST’s half-year results show?

IST’s consolidated profit after tax was broadly unchanged in the six months ended 30 September 2026, falling to Rs 100.62 crore from Rs 100.97 crore a year earlier. First-half revenue from operations increased 22% to Rs 71.00 crore from Rs 58.08 crore, reflecting stronger operating revenue despite the Q2 profit decline.

First-half segment results declined to Rs 127.64 crore from Rs 130.14 crore. The SEZ segment produced Rs 97.29 crore of profit before tax and finance cost, down from Rs 103.46 crore, while manufacturing contributed Rs 30.35 crore, compared with Rs 26.68 crore in the prior-year half.

Profit before tax for the half year declined to Rs 124.43 crore from Rs 128.98 crore, while tax expense fell to Rs 23.81 crore from Rs 28.01 crore. The associate’s contribution increased to Rs 48.05 lakh from Rs 33.46 lakh. Total comprehensive income rose to Rs 247.27 crore from Rs 135.77 crore after other comprehensive income of Rs 146.66 crore, compared with Rs 34.79 crore.

What changed in IST’s balance sheet and cash flow?

IST’s consolidated assets rose to Rs 2,088.52 crore at 30 September 2026 from Rs 1,822.42 crore at 31 March 2026. SEZ segment assets increased to Rs 1,704.35 crore from Rs 1,468.84 crore, while manufacturing segment assets rose to Rs 384.17 crore from Rs 353.58 crore.

Non-current investments were Rs 1,617.98 crore at 30 September 2026, compared with Rs 1,343.21 crore at the preceding year end. Other equity increased to Rs 1,933.64 crore from Rs 1,686.37 crore, taking total consolidated equity to Rs 1,939.49 crore from Rs 1,692.22 crore.

Consolidated liabilities increased to Rs 149.03 crore from Rs 130.20 crore. Deferred tax liabilities rose to Rs 81.67 crore from Rs 46.90 crore, while current liabilities declined to Rs 22.95 crore from Rs 37.18 crore. SEZ liabilities increased to Rs 123.22 crore from Rs 108.25 crore.

Net cash generated from operating activities was Rs 29.50 crore for the half year, compared with Rs 26.79 crore a year earlier. Investing activities used Rs 29.92 crore, including Rs 43.15 crore of net investment purchases, and cash and cash equivalents declined to Rs 3.20 crore at 30 September 2026 from Rs 4.71 crore at 31 March 2026.

Conclusion

IST’s Q2 results show that revenue growth did not translate into higher consolidated earnings. The 26% increase in operating revenue was outweighed by lower SEZ profit, a wider manufacturing loss, lower other income and higher expenses, resulting in a 39% fall in profit after tax to Rs 17.51 crore.

The unresolved matters disclosed by the results are whether manufacturing can move from its Rs 11.02 crore Q2 loss and whether SEZ profit can recover from Rs 37.37 crore. The next reported results will also show how movements in the Rs 1,617.98 crore non-current investment balance and Rs 81.67 crore deferred tax liability affect consolidated income and equity.