Meghmani Q2 revenue rose 18% as standalone EBITDA stayed flat

Meghmani reported Q2 FY27 standalone revenue of Rs 658.2 crore, up 18% year on year, but EBITDA was nearly unchanged at Rs 70.9 crore and the EBITDA margin fell to 10.8% from 12.6%. Management attributed the margin pressure to elevated input and logistics costs while realisations remained broadly flat.

Why did Meghmani’s standalone EBITDA stay flat despite revenue growth?

Meghmani’s standalone EBITDA stayed nearly flat because cost of goods sold rose faster than sales in Q2 FY27. Revenue from operations increased 18% to Rs 658.2 crore from Rs 557.7 crore in Q2 FY26, while cost of goods sold increased 25% to Rs 420.7 crore from Rs 336.0 crore. Gross profit consequently rose 7% to Rs 237.5 crore, and gross margin declined to 36.1% from 39.8%.

Operating costs also increased during the quarter. Employee expenses rose 13% to Rs 33.5 crore and other expenses increased 10% to Rs 133.2 crore. EBITDA was Rs 70.9 crore against Rs 70.5 crore a year earlier, while the margin declined by 1.8 percentage points to 10.8%; management said elevated input and logistics costs, alongside broadly flat realisations, caused the pressure.

Which Meghmani segment drove Q2 FY27 revenue growth?

Meghmani’s Crop Protection segment remained the larger Q2 FY27 business, accounting for about 75% of standalone revenue with Rs 496.7 crore, while Pigments accounted for about 25% with Rs 161.5 crore. Crop Protection revenue rose from Rs 442.6 crore in Q2 FY26, and Pigments revenue rose from Rs 115.0 crore over the same period.

Pigments delivered the larger year-on-year EBITDA improvement, although from a lower base. Pigments EBITDA increased to Rs 16.3 crore from Rs 4.0 crore and its margin rose to 10.1% from 3.5%. Crop Protection EBITDA declined to Rs 54.6 crore from Rs 74.9 crore, with its margin falling to 11.0% from 16.9%; the Pigments improvement therefore partly offset lower Crop Protection profitability.

Crop Protection production was 10,019 metric tonnes, or MT, in Q2 FY27, compared with 10,136 MT a year earlier, while capacity utilisation remained at 72%. Pigments production increased 13% to 4,252 MT from 3,759 MT and utilisation rose to 51% from 45%. Crop Protection exports represented 82% of segment revenue, versus 84%, while Pigments exports represented 66%, versus 79%.

How did Meghmani’s first-half segment performance compare?

Meghmani’s standalone revenue for H1 FY27 rose 3% to Rs 1,181.2 crore from Rs 1,150.3 crore, but the two segments moved differently. Crop Protection revenue declined to Rs 888.4 crore from Rs 900.5 crore, whereas Pigments revenue grew to Rs 292.8 crore from Rs 249.7 crore. Pigments therefore accounted for the reported first-half sales increase while Crop Protection remained the larger segment.

Crop Protection EBITDA declined to Rs 132.4 crore in H1 FY27 from Rs 153.9 crore in H1 FY26, and its EBITDA margin narrowed to 14.9% from 17.1%. Production fell to 18,899 MT from 20,793 MT and utilisation declined to 68% from 74%. Its export share changed to 84% of revenue from 85% in the earlier first half.

Pigments recorded H1 FY27 EBITDA of Rs 32.2 crore, compared with Rs 11.1 crore in H1 FY26, and its margin increased to 11.0% from 4.4%. Revenue grew 17% even though production was broadly stable at 7,485 MT against 7,537 MT. Utilisation edged down to 45% from 46%, while exports declined to 67% of revenue from 83%.

Why did Meghmani’s consolidated earnings rise faster than standalone earnings?

Meghmani’s consolidated Q2 FY27 EBITDA increased 40% to Rs 73.1 crore and profit after tax increased 193% to Rs 33.9 crore, unlike the 1% increase in standalone EBITDA. Consolidated revenue rose 16% to Rs 666.9 crore from Rs 577.3 crore, and the consolidated EBITDA margin rose to 11.0% from 9.0%.

Lower consolidated other expenses and finance costs supported the earnings increase. Other expenses declined 6% to Rs 137.5 crore and finance cost fell 37% to Rs 15.0 crore. Consolidated gross margin nevertheless declined to 37.0% from 40.8% as cost of goods sold rose 23% to Rs 420.0 crore, showing that the improvement below gross profit offset the gross-margin reduction.

On the standalone statement, finance cost declined 41% to Rs 11.2 crore, helping profit after tax rise 6% to Rs 45.3 crore despite lower operating margin. Other income declined 26% to Rs 20.7 crore and tax expense was Rs 12.8 crore, compared with Rs 14.6 crore in Q2 FY26. Standalone profit after tax margin declined to 6.9% from 7.7%.

What changed in Meghmani’s standalone balance sheet?

Meghmani’s standalone trade receivables increased to Rs 847 crore at September 2026 from Rs 653 crore at March 2026, while inventories rose to Rs 546 crore from Rs 504 crore. Together, these items increased by Rs 236 crore, compared with a Rs 234 crore increase in current assets to Rs 1,478 crore from Rs 1,244 crore.

Current liabilities increased to Rs 1,261 crore at September 2026 from Rs 1,111 crore at March 2026. Trade payables rose to Rs 640 crore from Rs 502 crore, current tax liabilities increased to Rs 47 crore from Rs 26 crore, and cash and cash equivalents declined to Rs 15 crore from Rs 22 crore. Short-term borrowings fell to Rs 495 crore from Rs 506 crore.

Shareholders’ funds increased to Rs 1,862 crore at September 2026 from Rs 1,758 crore at March 2026. Long-term borrowings declined to Rs 5 crore from Rs 27 crore, while total assets rose to Rs 3,214 crore from Rs 2,984 crore. Investments in subsidiaries increased to Rs 714 crore from Rs 681 crore, whereas property, plant and equipment declined to Rs 880 crore from Rs 901 crore.

Conclusion

Meghmani’s Q2 FY27 results show that an 18% rise in standalone revenue to Rs 658.2 crore did not translate into comparable operating-profit growth because cost of goods sold rose 25% and standalone EBITDA margin declined to 10.8%. Crop Protection generated Rs 496.7 crore of quarterly revenue but had lower EBITDA of Rs 54.6 crore, while Pigments EBITDA rose to Rs 16.3 crore.

The disclosed unresolved issue is whether elevated input and logistics costs and broadly flat realisations continue to affect margins after Q2 FY27. Further reported movements in Crop Protection utilisation, which was 68% in H1 FY27, and in trade receivables and inventory, which stood at Rs 847 crore and Rs 546 crore respectively at September 2026, will also remain relevant.