KRN H1 FY27 revenue doubles as Q2 EBITDA margin contracts

KRN reported revenue from operations of Rs 571.45 crore in the first half (H1) of FY27, up 113.75% year on year, while net profit rose 126.68% to Rs 69.01 crore. The expansion coincided with lower second-quarter (Q2) operating profitability: EBITDA margin fell 4.63 percentage points to 15.27%, despite Q2 revenue rising 109.86% to Rs 319.14 crore.

How fast did KRN grow in H1 FY27?

KRN more than doubled H1 FY27 revenue and net profit from the prior-year period. Revenue from operations increased from Rs 267.35 crore in H1 FY26 to Rs 571.45 crore in H1 FY27, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose from Rs 47.85 crore to Rs 97.81 crore. Net profit increased from Rs 30.44 crore to Rs 69.01 crore.

Net profit growth outpaced revenue growth over the six-month period. Revenue rose 113.75%, EBITDA grew 104.40%, and net profit grew 126.68%, according to the consolidated financial highlights. Earnings per share (EPS) increased 118.78% from Rs 4.90 in H1 FY26 to Rs 10.72 in H1 FY27, while net profit margin rose from 11.39% to 12.08%.

KRN reported H1 FY27 profit before tax of Rs 88.19 crore, compared with Rs 45.23 crore a year earlier. Profit before tax before exceptional item or other income increased from Rs 39.26 crore to Rs 77.92 crore, while exceptional item or other income rose from Rs 5.97 crore to Rs 10.26 crore. Both reported components were higher than in H1 FY26.

Why did KRN's Q2 EBITDA margin decline?

KRN's Q2 FY27 EBITDA margin declined to 15.27% from 19.90% in Q2 FY26, a reduction of 4.63 percentage points. EBITDA still rose 61.10% to Rs 48.75 crore because revenue increased 109.86% to Rs 319.14 crore, compared with Rs 152.07 crore in the year-earlier quarter.

Total expenditure increased faster than revenue during Q2 FY27. Raw-material expense increased from Rs 104.29 crore to Rs 224.87 crore, employee cost rose from Rs 10.27 crore to Rs 22.15 crore, and other expenses increased from Rs 7.26 crore to Rs 23.37 crore. Total expenditure reached Rs 270.39 crore, up from Rs 121.81 crore, leaving EBITDA growth below revenue growth.

The quarterly margin outcome differed from the six-month comparison. H1 FY27 EBITDA margin was 17.12%, down 0.78 percentage points from 17.90% in H1 FY26. The Q2 margin of 15.27% was below the H1 level, while Q2 FY27 revenue of Rs 319.14 crore exceeded half of H1 revenue of Rs 571.45 crore.

What happened to KRN's quarterly profit after costs and other income?

KRN's Q2 FY27 net profit doubled to Rs 36.11 crore from Rs 18.02 crore, even as net profit margin edged down to 11.32% from 11.85%. EPS rose 90.34% to Rs 5.52 from Rs 2.90, reflecting the increase in reported quarterly net profit.

Finance cost increased from Rs 0.86 crore in Q2 FY26 to Rs 3.05 crore in Q2 FY27, and depreciation increased from Rs 4.85 crore to Rs 7.32 crore. Consequently, profit before tax before exceptional item or other income rose to Rs 38.37 crore from Rs 24.55 crore, a slower increase than the 61.10% rise in EBITDA.

Exceptional item or other income was Rs 7.49 crore in Q2 FY27, compared with Rs 2.39 crore in Q2 FY26. This took reported profit before tax to Rs 45.86 crore from Rs 26.94 crore. Tax expense, including deferred tax, increased to Rs 9.75 crore from Rs 8.92 crore, after which net profit was Rs 36.11 crore.

How did KRN's H1 cost structure and margins compare with last year?

KRN's H1 FY27 EBITDA margin was 17.12%, compared with 17.90% in H1 FY26, while its net profit margin increased to 12.08% from 11.39%. The net profit increase outpaced revenue growth despite the lower EBITDA margin, alongside higher exceptional item or other income and the presentation's reported tax expense.

Raw-material expense increased from Rs 190.00 crore in H1 FY26 to Rs 395.89 crore in H1 FY27. Employee costs rose from Rs 16.92 crore to Rs 40.34 crore and other expenses from Rs 12.57 crore to Rs 37.41 crore. Total expenditure was Rs 473.64 crore, compared with Rs 219.50 crore, against the Rs 304.10 crore increase in revenue.

Financing and depreciation charges also expanded during the half year. Finance costs rose from Rs 1.56 crore to Rs 6.09 crore, while depreciation rose from Rs 7.03 crore to Rs 13.79 crore. Tax expense was Rs 19.18 crore in H1 FY27 versus Rs 14.79 crore in H1 FY26, yet net profit rose by Rs 38.57 crore as profit before tax increased by Rs 42.96 crore.

What does KRN say will support future growth?

KRN management says expanded manufacturing capabilities at Neemrana provide scale to pursue larger programmes. Chairman and Managing Director Santosh Kumar Yadav said KRN is qualifying more customers, widening its product range and has capacity still available to support its growth plans, following H1 FY27 revenue of Rs 571.45 crore.

Management identified data-centre cooling, liquid-cooling product development and bus air-conditioning supplies as growth areas. KRN said new data-centre customers have started working with it and that it has begun supplying an original equipment manufacturer (OEM) in bus air conditioning. In H1 FY27, exports accounted for 22.01% of sales and domestic sales represented 77.99%.

The export mix disclosed by KRN was concentrated in North America and Europe. The United States accounted for 43.75% of export revenue, followed by Canada at 12.82%, France at 12.67%, the United Kingdom at 7.93% and Italy at 7.65%. Management said customers in North America and Europe are giving KRN more business, but the presentation did not provide an export revenue amount or a period-on-period export comparison.

Conclusion

KRN's H1 FY27 results show revenue growing 113.75% to Rs 571.45 crore and net profit increasing 126.68% to Rs 69.01 crore, with net profit margin rising to 12.08%. However, the Q2 EBITDA margin fell to 15.27% from 19.90%, as quarterly total expenditure reached Rs 270.39 crore while revenue was Rs 319.14 crore.

The next results will show whether KRN can translate Neemrana capacity, customer qualifications and data-centre cooling activity into continued growth while improving or sustaining margins. Management's disclosed plans include liquid-cooling product development and expanding bus air-conditioning customers, while exports, which represented 22.01% of H1 FY27 sales, remain an area to watch.