Panache Digilife Limited Q2 revenue rose 232% to Rs 129.6 crore

Panache reported Q2 FY ’27 revenue from operations of Rs 129.6 crore, up 231.8% year on year, while operating earnings before interest, tax, depreciation and amortisation (EBITDA) margin rose 313 basis points to 9.6% and profit after tax increased 450.8% to Rs 7.7 crore.

What did Panache report for Q2 and H1 FY ’27?

Panache reported sharply higher Q2 FY ’27 sales and profit, with revenue from operations rising 231.8% year on year and 154.9% quarter on quarter to Rs 129.6 crore. Revenue for H1 FY ’27 reached Rs 180.4 crore, a 163.0% increase from the corresponding prior-year period. Q2 therefore represented about 72% of the first-half revenue reported by Panache.

Operating EBITDA grew faster than sales in both reported periods. Q2 operating EBITDA increased 293.5% year on year to Rs 12.4 crore, while H1 operating EBITDA rose 296.5% to Rs 17.6 crore. Profit after tax, or PAT, rose about 5.5 times in Q2 to Rs 7.7 crore and increased 407.8% in H1 to Rs 11.5 crore.

The movement between the two periods shows that the Q2 sales increase was accompanied by a larger increase in operating EBITDA and PAT. Panache’s Q2 operating EBITDA of Rs 12.4 crore was equivalent to about 70% of its H1 operating EBITDA of Rs 17.6 crore, while Q2 PAT of Rs 7.7 crore accounted for about 67% of H1 PAT.

Why did Panache’s margins expand year on year?

Panache said operating EBITDA margin expanded to 9.6% in Q2 FY ’27 from 6.4% in Q2 FY ’26, an increase of 313 basis points, where one basis point equals one-hundredth of a percentage point. Management attributed the Q2 change to execution, operating leverage from higher revenue, a better mix and greater sales of value-added solutions.

PAT margin rose to 5.9% in Q2 FY ’27, up 234 basis points year on year, alongside the 450.8% increase in PAT to Rs 7.7 crore. For H1 FY ’27, operating EBITDA margin was 9.7%, up 328 basis points, and PAT margin was 6.3%, up 304 basis points. The first-half margin outcome was therefore slightly higher than the Q2 operating margin and PAT margin.

Management also addressed a sequential margin decline raised by an analyst during the call. The company said the Q2 product mix was weighted more towards contract-led manufacturing, or CLM, than in the previous quarter. This explains why the 9.6% Q2 operating EBITDA margin was lower sequentially even though it was 313 basis points higher than the 6.4% margin in Q2 FY ’26.

How does the CLM and DLM mix affect Panache’s profitability?

Panache said its H1 FY ’27 blended business mix was approximately 60% CLM and 40% design-led manufacturing, or DLM, and management expects to maintain that broad annual mix. In CLM, customers provide product designs and specifications while Panache supplies manufacturing, engineering support and quality processes. Management described CLM margins as typically ranging from 3% to 7%, depending on the engagement.

DLM gives Panache a role from product concept and design through manufacturing, supported by its research and development team. Management said DLM margins can range from 5% to 20% and can be higher depending on design and component-design capabilities. The model can also generate software, firmware and lifecycle-service revenue, according to the company’s description of the business.

The difference in the two models is central to management’s stated margin plan. Panache said its financial priority is to improve margins through a higher share of design-led business, but it also said CLM contracts remain healthy and that it is seeking to balance the two. The company did not provide separate reported revenue or profit figures for CLM and DLM in H1 FY ’27.

What changed in Panache’s balance sheet and cash conversion cycle?

Panache reported net worth of Rs 117 crore as of September 30, 2026, compared with Rs 105.6 crore as of March 31, 2026. Total borrowings stood at Rs 33.9 crore and cash and cash equivalents were Rs 9.7 crore, resulting in reported net debt of Rs 24.1 crore. Net debt to operating EBITDA was 0.69 times, compared with 0.81 times at the end of FY ’26.

Working-capital efficiency improved over the periods disclosed by management. Panache said its cash conversion cycle declined from 172 days to 83 days in FY ’26, then fell further to 68 days on an annualised basis as of September 30, 2026. The cash conversion cycle measures the time taken to convert cash spent on inventory and operations back into cash receipts.

Panache also reported return on capital employed, or ROCE, of 25.8% and return on equity, or ROE, of 20.7% on an annualised H1 FY ’27 basis. In FY ’26, ROCE was 25.6% and ROE was 18.9%, compared with 13.6% and 14.1%, respectively, in FY ’25. Management said its priorities include tighter working capital and prudent funding of growth.

What are Panache’s disclosed growth plans and constraints?

Panache disclosed a telecom-sector project through subsidiary Panache Newage Technology Private Limited, covering a technology solution, installation, configuration, technical support and real-time monitoring. Management said the contract is expected to be executed over 36 months, but did not disclose the value, revenue-recognition schedule or margins because of a customer non-disclosure agreement and market-sensitive pricing considerations.

Management said existing infrastructure has spare capacity for around 40% additional output from current levels, while cautioning that revenue capacity cannot be expressed as a single number. It cited product values ranging from Rs 2,000 to Rs 2 lakh, including higher-end artificial-intelligence computing boxes. Panache is also discussing capacity enhancement through its investment in Technofy, according to management.

Panache is expanding products including artificial-intelligence PCs, laptops, mini PCs and servers, while management identified supply constraints for memory and other components as a consideration. The company said it would work gradually with long-term customers in these product categories. It also said its third and fourth quarters have historically been stronger than the first half, excluding pandemic-affected years, but gave no formal FY ’27 revenue or margin guidance.

Conclusion

Panache’s Q2 FY ’27 result combined a 231.8% rise in revenue to Rs 129.6 crore with operating EBITDA margin expansion to 9.6% and PAT margin expansion to 5.9%. The H1 figures, including Rs 180.4 crore of revenue, Rs 17.6 crore of operating EBITDA and Rs 11.5 crore of PAT, show that earnings rose faster than sales over the reported first-half period.

The next disclosures to watch are execution of the 36-month telecom project, the planned 60% CLM and 40% DLM annual mix, and whether the cash conversion cycle remains below the 83 days reported for FY ’26. Management said it expects to provide formal guidance after a couple of quarters, while it manages electronic-component supply-chain volatility and dollar volatility.