Nirlon Limited H1 FY27 PAT Falls 31% After Tax Reversal

Nirlon Limited reported profit after tax of Rs 141.3 crore for H1 FY27, 31.4% lower year on year, although operating and pre-tax profits increased. The decline primarily reflected the absence of a Rs 69.50 crore deferred-tax-liability reversal recorded in H1 FY26, after the company moved to the new tax regime.

Why did Nirlon Limited's H1 FY27 profit after tax decline?

Nirlon's H1 FY27 profit after tax declined because the comparable H1 FY26 period included a one-time Rs 69.50 crore reversal of deferred tax liability. This accounting benefit did not recur in H1 FY27 after the company transitioned to the new tax regime.

The year-on-year movement in profit after tax therefore differs from the trend in the company's operating and pre-tax performance. Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 2.0% to Rs 270.1 crore. Profit before tax increased 3.4% to Rs 189.4 crore from Rs 183.2 crore.

This distinction is important for investors assessing the half-year numbers. The reported profit after tax comparison includes the tax-related benefit recorded a year earlier, while EBITDA and profit before tax show the underlying movement before the tax charge.

The H1 FY27 results are linked to the quarter and half-year ended September 30, 2026. Nirlon had scheduled a board meeting on November 2, 2026, to consider and approve the unaudited financial results and take the limited review report on record.

How did Nirlon's income and operating margin change in H1 FY27?

Nirlon's total income rose 3.2% year on year to Rs 346.8 crore in H1 FY27, while total expenses increased at a faster 7.9% pace to Rs 76.7 crore. The difference in growth rates resulted in a lower EBITDA margin.

EBITDA margin declined by 95 basis points to 77.88% from 78.83% in H1 FY26. One basis point equals one-hundredth of a percentage point. Despite the margin movement, EBITDA increased in absolute terms because income also grew during the period.

The operating figures indicate that income growth continued, but expenses consumed a somewhat larger share of income than in the prior-year half. The supplied presentation does not provide a full-year FY27 forecast, so it does not set out management's expected trajectory for income, expenses or margins over the remainder of the financial year.

What do Nirlon's Q2 FY27 results show?

Nirlon's Q2 FY27 figures show continued year-on-year growth in licence fees, total income, EBITDA and profit before tax. Licence fees were Rs 149.9 crore, up 2.4% from Rs 146.4 crore in Q2 FY26 and 0.6% from Rs 149.0 crore in Q1 FY27.

Total income for the September quarter increased 3.1% year on year to Rs 174.1 crore. EBITDA rose 2.7% to Rs 136.5 crore, while profit before tax increased 3.3% to Rs 96.1 crore.

The sequential movement in licence fees was limited, with Q2 revenue slightly above the preceding June quarter. The year-on-year increases in the quarterly operating and pre-tax figures are consistent with the half-year trend, even as the tax comparison affected reported profit after tax.

The company also announced an earnings conference call for November 2, 2026, at 4:00 p.m. IST. Chief Executive Officer Rahul Sagar and Chief Financial Officer Manish Parikh were named as management participants for the discussion on H1 FY27 performance.

What corporate actions have Nirlon shareholders recently approved?

Nirlon shareholders approved all four resolutions at the company's 67th annual general meeting in September 2026 through remote e-voting, with 100% approval reported. The resolutions included approval of the audited financial statements for FY2025-26 and the final dividend.

The final dividend approved for FY2025-26 was Rs 15 per share, described as a 150% payout. The book closure for the annual general meeting and final dividend was scheduled from September 4, 2026 to September 18, 2026.

Promoter holding was reported at 67.6% in Q2 FY27, compared with 67.7% in Q1 FY27 and the preceding reported quarters. The data points to a marginal change in promoter ownership during the period.

The board's November 2 meeting is a key scheduled disclosure because it covers the quarter and half-year ended September 30, 2026. The approved financial statements, limited review report and management commentary from the earnings call are relevant for shareholders tracking the company's operating performance and tax-related comparisons.

Conclusion

Nirlon's H1 FY27 results show modest growth in income, EBITDA and profit before tax, while reported profit after tax declined because H1 FY26 included a deferred-tax-liability reversal of Rs 69.50 crore. The 95-basis-point fall in EBITDA margin also reflects that expenses increased faster than total income during the half-year.

The next item to watch is the formal outcome of the November 2, 2026 board meeting and the subsequent earnings call. Nirlon has not provided a full-year FY27 forecast, leaving its outlook for income growth, expenses and operating margins undisclosed.