Nirlon H1 FY27 profit falls 31% as tax reversal lapses

Nirlon Limited reported profit after tax of Rs 141.3 crore for H1-FY27, down 31.4% year on year, although profit before tax rose 3.4% to Rs 189.4 crore. The difference reflects a Rs 69.50 crore deferred-tax-liability reversal in H1-FY26 that did not recur after Nirlon moved to the new tax regime.

Why did Nirlon’s H1-FY27 profit after tax fall?

Nirlon’s reported profit after tax fell because tax changed from a Rs 22.9 crore credit in H1-FY26 to a Rs 48.1 crore expense in H1-FY27. Profit after tax declined to Rs 141.3 crore from Rs 206.1 crore, while diluted earnings per share fell 31.4% to Rs 15.68 from Rs 22.87.

The prior-year comparison included a non-recurring tax item. Nirlon said it adopted the new tax regime from Q2-FY26 and remeasured its opening deferred tax liability, resulting in a Rs 69.50 crore reversal in Q2-FY26. The H1-FY27 tax expense therefore reduced the profit-after-tax margin to 40.74%, from 61.36% a year earlier, even though pre-tax earnings increased.

Did Nirlon’s operating profit rise in H1-FY27?

Yes, Nirlon’s operating and pre-tax profit both increased in H1-FY27. Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 2.0% to Rs 270.1 crore from Rs 264.8 crore, while profit before tax, or PBT, increased 3.4% to Rs 189.4 crore from Rs 183.2 crore.

The increase came with a narrower operating margin. Total income grew 3.2% to Rs 346.8 crore, while total expenses rose 7.9% to Rs 76.7 crore. EBITDA margin consequently declined by 95 basis points, where one basis point is one-hundredth of a percentage point, to 77.88% from 78.83%. Finance cost fell 2.2% to Rs 52.8 crore, partly offsetting a 1.1% increase in depreciation to Rs 27.9 crore.

What drove Nirlon’s income growth in H1-FY27?

Nirlon’s income growth was led by licence fees and other operating income. Licence fees rose 2.5% to Rs 298.9 crore in H1-FY27 from Rs 291.6 crore in H1-FY26. Other operating income, including common area maintenance, or CAM, rose 4.9% to Rs 38.5 crore from Rs 36.7 crore, while other income increased 23.7% to Rs 9.4 crore from Rs 7.6 crore.

The September quarter continued that trend. Q2-FY27 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. Q2-FY27 total income rose 3.1% year on year to Rs 174.1 crore, EBITDA increased 2.7% to Rs 136.5 crore, and PBT rose 3.3% to Rs 96.1 crore.

What do occupancy and renewals show about Nirlon’s income base?

Nirlon reported combined occupancy of 99.8% at Nirlon Knowledge Park and Nirlon House in both Q1-FY27 and Q2-FY27, compared with 98.6% in Q2-FY26. As of 30 September 2026, approximately 6,800 square feet was vacant across the two properties, comprising about 1,800 square feet at Nirlon Knowledge Park and 5,000 square feet at Nirlon House.

Nirlon also disclosed that NIUM India Pvt Ltd renewed approximately 37,000 square feet at Nirlon Knowledge Park that had been due to expire in FY28. The portfolio has 3.08 million square feet of chargeable area across five phases, against 4.77 million square feet of constructed area. Phase V has the largest chargeable area, at 1.16 million square feet.

How does H1-FY27 compare with Nirlon’s recent results and debt?

Nirlon’s H1-FY27 EBITDA margin of 77.88% was below 78.36% in FY26, 79.33% in FY25 and 79.26% in FY24. FY26 total income was Rs 683.3 crore and EBITDA was Rs 535.4 crore, compared with Rs 346.8 crore and Rs 270.1 crore respectively in the first half of FY27. The presentation does not provide a full-year FY27 forecast.

Nirlon’s reported profit margin was also affected by the tax-regime change. Profit-after-tax margin was 50.64% in FY26, compared with 33.83% in FY25 and 33.85% in FY24, while H1-FY27 was 40.74%. At 30 September 2026, Nirlon said HSBC had sanctioned secured debt facilities of Rs 1,230 crore, including an overdraft facility, and debt outstanding from HSBC was Rs 1,150 crore.

Which licence resets could affect Nirlon after H1-FY27?

Nirlon has disclosed licence renewals or resets for 290,000 square feet in FY28, 573,000 square feet in FY29 and 612,000 square feet in FY30. The FY30 amount is the largest disclosed annual reset or renewal volume in the schedule as of 30 September 2026.

The schedule also lists 233,000 square feet for FY31, 107,000 square feet for FY32 and 98,000 square feet for FY33, alongside 3,000 square feet in FY27. Nirlon states that the schedule assumes licences continue through their total licence or notice period, including renewal options. It is therefore a schedule of potential renewal and reset activity rather than a record of completed agreements.

Conclusion

Nirlon’s H1-FY27 earnings show a split between reported net profit and the operating trend. Licence fees, total income, EBITDA and PBT all rose from H1-FY26, but the tax line moved from a credit to an expense following the absence of the earlier deferred-tax reversal. Higher expenses than income also reduced the EBITDA margin by 95 basis points.

The next periods will show whether Nirlon can maintain 99.8% occupancy and continue licence-fee growth while managing expense growth. The disclosed renewal and reset schedule is a key item to monitor, beginning with 290,000 square feet due in FY28 and followed by 573,000 square feet in FY29.