Kerala Ayurveda Limited narrows Q2 loss, targets breakeven

Kerala Ayurveda Limited narrowed its Q2 FY27 operating EBITDA loss by Rs 1.05 crore sequentially as revenue from operations rose 2.6% year on year to Rs 35.75 crore, and management reiterated a target of monthly operating EBITDA breakeven during H2 FY27. The company attributed the operating improvement to lower staff, marketing and discounting costs.

How did KAL's Q2 FY27 profitability change?

KAL reported an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of Rs 2.1 crore in Q2 FY27, an improvement of Rs 1.2 crore from Q2 FY26. Separately, the company said its operating EBITDA loss narrowed by Rs 1.05 crore sequentially, alongside a 370-basis-point improvement; one basis point equals one-hundredth of a percentage point.

Profit before tax was a loss of Rs 6.4 crore in Q2 FY27, improving by Rs 0.5 crore year on year, while loss after tax was Rs 6.1 crore, improving by Rs 0.3 crore. KAL identified Rs 2.58 crore of promoter-loan interest in the quarter as an item weighing on profit before tax despite the operating improvement.

KAL also reported 7.7% sequential growth in operating revenue during Q2 FY27. Management said tighter cost controls and margin efficiencies helped offset headwinds from delayed debt raising, working-capital constraints and higher prices for plastic and oil derivatives.

Which costs did KAL reduce in Q2 FY27?

KAL reduced corporate staff costs by Rs 97 lakh, or 7% quarter on quarter, through consolidation of roles across functions. Digital marketing expenditure fell by Rs 27 lakh, or 17% sequentially, while customer discounting declined by Rs 7 lakh. The company linked these measures to the Rs 1.05 crore sequential reduction in its operating EBITDA loss.

The cost actions came as KAL faced higher input costs and deferred capital-expenditure-led revenue projects after a delay in closing debt raising. Management said the decision to focus further on cost control and margin efficiency was intended to support EBITDA breakeven amid these constraints.

KAL converted Rs 12.5 crore of total promoter loans in October 2026. The announcement did not disclose the promoter-loan balance after conversion or quantify any future interest reduction, but it reported Rs 2.58 crore of promoter-loan interest for Q2 FY27.

Which KAL businesses drove Q2 FY27 revenue growth?

KAL's Global Health Services excluding the US generated Rs 11.26 crore in Q2 FY27, up 17.9% year on year, while India Medical Sales generated Rs 11.69 crore, up 13.4%. Global E-Product revenue rose 15.8% to Rs 6.46 crore, whereas the US Academy & Wellness Center declined 10.4% to Rs 6.34 crore.

Within Global E-Product, KAL said India E-Product grew 12.7% despite lower marketing expenditure after a shift from paid search to lower-cost channels. US E-Product rose 27.2%, led by Amazon US. In Global Health Services excluding the US, The Health Village grew 36%, India Clinics rose 18%, Ayurvedagram increased 12%, and Singapore Clinics increased 17%.

The US Academy & Wellness Center was the only reported major segment to decline in Q2 FY27. KAL said Academy revenue fell 16.6% because of lower certification enrolments amid US macroeconomic conditions and a postponed India immersion, while Wellness Center growth slowed to 4.3% because of Vaidya availability amid H-1B disruptions.

What changed in KAL's first half of FY27?

KAL's H1 FY27 revenue from operations rose 8.7% to Rs 68.9 crore from Rs 63.5 crore a year earlier, while adjusted EBITDA loss narrowed by Rs 3.9 crore to Rs 4.6 crore from Rs 8.5 crore. The adjusted measure differs from reported EBITDA because H1 FY26 included Rs 9.5 crore of one-time income from a land sale and foreign-exchange benefits.

Reported EBITDA was a loss of Rs 5.6 crore in H1 FY27, a year-on-year decline of Rs 7.6 crore, while total income fell 6.3% to Rs 69.9 crore. Loss before tax was Rs 14.6 crore and loss after tax was Rs 14.2 crore, with the source showing year-on-year declines of Rs 10.6 crore and Rs 9.8 crore respectively.

At segment level, Global E-Product grew 26.5% to Rs 12.90 crore in H1 FY27, Global Health Services excluding the US rose 13.3% to Rs 20.45 crore, and India Medical Sales increased 11.5% to Rs 21.17 crore. US Academy & Wellness Center was broadly flat at Rs 13.69 crore versus Rs 13.72 crore in H1 FY26.

What are KAL's FY27 targets and expansion plans?

KAL management said it is on track to deliver Rs 150 crore of FY27 revenue from operations, representing 15% growth year on year, and to halve full-year adjusted EBITDA losses versus the previous year. Management also reiterated its expectation of monthly operating EBITDA breakeven in H2 FY27; elsewhere in the announcement, it referred to adjusted EBITDA breakeven by Q3.

The expansion plan includes new clinics in San Jose, California, Eindhoven and India, all planned to open by February 2027. KAL described Eindhoven as its first clinic in Europe. It also listed a second The Health Village property in Karwar, Karnataka, for November 2026.

KAL began transitioning to ERP-Next in October 2026 to improve real-time visibility across finance, inventory and operations. It has also started engaging investors regarding a potential fund raise, with details to be disclosed later. Management's Vision 2030 ambition is to scale consolidated revenue from Rs 100 crore in FY24 to Rs 1,000 crore by FY30.

Conclusion

KAL's Q2 FY27 update shows a narrower sequential operating EBITDA loss, supported by Rs 97 lakh of lower corporate staff costs, Rs 27 lakh of lower digital marketing expenditure and Rs 7 lakh of reduced customer discounting. Revenue growth was led by Global Health Services excluding the US, India Medical Sales and Global E-Product, while promoter-loan interest of Rs 2.58 crore continued to affect reported profitability.

The next measures to watch are progress toward management's H2 FY27 monthly operating EBITDA breakeven target, delivery against the Rs 150 crore FY27 revenue objective and the planned clinic openings by February 2027. KAL has also disclosed an ongoing potential fund-raising process and a promoter-loan conversion of Rs 12.5 crore completed in October 2026, but has not yet provided further terms or financial effects.