Premier Explosives H1 profit falls 55% as other income drops

Premier Explosives Limited reported H1FY27 profit after tax of Rs 15 crore, down 55% year on year, as other income fell to Rs 4.32 crore from Rs 28.96 crore in H1FY26 despite revenue rising 14% to Rs 247.84 crore. The half-year result contrasts with a 92% increase in Q2FY27 revenue.

Why did Premier Explosives’ H1FY27 profit fall despite revenue growth?

Premier Explosives’ H1FY27 profit after tax (PAT) declined to Rs 15 crore from Rs 33.19 crore in H1FY26, while revenue from operations rose to Rs 247.84 crore from Rs 217.72 crore. Other income fell by Rs 24.64 crore year on year to Rs 4.32 crore, compared with the prior-year level of Rs 28.96 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) also declined 16% to Rs 23.11 crore in H1FY27 from Rs 27.49 crore in H1FY26. EBITDA margin decreased by 330 basis points to 9.3% from 12.6%, while profit before tax fell 58% to Rs 20.27 crore from Rs 48.72 crore.

The Rs 30.12 crore increase in half-year revenue was accompanied by a Rs 30.29 crore increase in raw-material cost, which reached Rs 161.25 crore. Employee-benefit expense rose to Rs 37.71 crore from Rs 35.30 crore and other expenses increased to Rs 25.76 crore from Rs 23.98 crore, resulting in lower EBITDA despite higher sales.

Cash PAT, defined in the presentation as PAT plus depreciation, fell 47% to Rs 20.83 crore from Rs 39.03 crore. Depreciation was nearly unchanged at Rs 5.83 crore in H1FY27 against Rs 5.84 crore a year earlier, meaning the cash-profit decline corresponded primarily with the lower reported earnings.

How did Premier Explosives’ Q2FY27 operating performance change?

Premier Explosives’ Q2FY27 revenue rose 92% year on year to Rs 145.28 crore from Rs 75.58 crore, while EBITDA increased to Rs 17.23 crore from Rs 6.61 crore. EBITDA margin improved to 11.9% from 8.7%, a gain of 312 basis points, showing a different operating trend from the H1FY27 comparison.

The second quarter also improved from Q1FY27, when revenue was Rs 102.56 crore and EBITDA was Rs 5.88 crore. Q2FY27 revenue was 42% higher quarter on quarter, while EBITDA increased 193%, lifting EBITDA margin by 613 basis points from 5.7% in Q1FY27.

PAT nevertheless fell 33% year on year in Q2FY27 to Rs 11.97 crore from Rs 17.88 crore. Q2 other income was Rs 2.54 crore, compared with Rs 23.07 crore in Q2FY26, a Rs 20.53 crore reduction that exceeded the Rs 10.62 crore increase in EBITDA.

Raw-material cost rose to Rs 94.61 crore in Q2FY27 from Rs 36.61 crore a year earlier, while employee-benefit expense increased to Rs 18.86 crore from Rs 17.69 crore. Other expenses were Rs 14.57 crore, marginally below Rs 14.67 crore in Q2FY26, and the revenue increase of Rs 69.70 crore exceeded the rise in the stated operating-cost lines.

Which businesses drove Premier Explosives’ revenue growth?

Premier Explosives’ Defence & Space services segment drove the Q2FY27 increase, reporting revenue of Rs 124.6 crore, up 97% from Rs 63.2 crore in Q2FY26. Commercial Explosives generated Rs 20.7 crore, up 67% from Rs 12.4 crore, making it the smaller contributor to quarterly revenue of Rs 145.3 crore.

Defence & Space services revenue increased 57% sequentially from Rs 79.3 crore in Q1FY27 to Rs 124.6 crore in Q2FY27. Commercial Explosives declined 11% from Rs 23.3 crore in Q1FY27 to Rs 20.7 crore, so the total revenue increase of 42% quarter on quarter came from Defence & Space services growth.

For H1FY27, Defence & Space services rose 10% to Rs 203.8 crore from Rs 186.1 crore, while Commercial Explosives rose 39% to Rs 44 crore from Rs 31.6 crore. Defence & Space services added Rs 17.7 crore of the Rs 30.1 crore total half-year revenue increase because of its larger starting revenue base.

What should readers watch after Premier Explosives’ H1FY27 results?

Premier Explosives reported an order book of Rs 1,642 crore as of October 2026, equivalent to about 4.23 times FY26 revenue according to the presentation. Defence accounted for 96% of the order book, while Explosives and Services each represented 2%, placing order execution in the defence segment at the centre of the disclosed backlog.

The order book had risen from Rs 750 crore in March 2025 and Rs 964.7 crore in March 2024 to Rs 1,642 crore in October 2026. The presentation identifies Premier Explosives as the only qualified Indian company for countermeasures and says it also exports fully assembled rocket motors, although it gives no revenue contribution for either activity.

Apollo Micro Systems is proposed to acquire a 41.33% promoter stake in Premier Explosives for about Rs 1,550 crore in cash. The presentation expected closing in Q3FY27, or December 2026, subject to approvals, and states that the open-offer payment at Rs 705.65 per share was made on November 4, 2026.

Management presented the proposed combination as covering defence electronics, energetic materials, rocket motors, ammunition and countermeasures, and aerospace systems. Its stated value-creation plans include combined engineering and research-and-development capabilities, cost efficiencies from integration and scale, and wider domestic and export market access; these remain plans pending the disclosed approvals.

Conclusion

The H1FY27 figures show that higher revenue did not translate into higher half-year earnings because operating margin narrowed and other income was substantially lower than in H1FY26. The quarterly figures, however, show a recovery in revenue and EBITDA from both Q2FY26 and Q1FY27, led by Defence & Space services.

The next disclosed developments are execution of the Rs 1,642 crore October 2026 order book, of which defence represents 96%, and the approval process for the Apollo Micro Systems transaction. The presentation expects the transaction to close in Q3FY27, or December 2026, while management’s integration and market-expansion objectives are forward-looking plans.