Rishabh H1FY27 profit falls 10.1% despite revenue growth

Rishabh reported a 10.1% year-on-year fall in consolidated H1FY27 profit to Rs 37.5 crore, although revenue from operations increased 6.3% to Rs 411.1 crore, as gross margin declined by 250 basis points, depreciation and finance costs increased, and the company recognised a Rs 2.5 crore withholding-tax provision.

Why did Rishabh’s H1FY27 profit decline despite higher revenue?

Rishabh’s reported profit declined because the 6.3% increase in H1FY27 revenue did not carry through to profit after tax (PAT). Revenue from operations rose from Rs 386.7 crore in H1FY26 to Rs 411.1 crore in H1FY27, while reported EBITDA, or earnings before interest, tax, depreciation and amortisation, increased 6.4% from Rs 61.8 crore to Rs 65.7 crore. PAT nevertheless fell from Rs 41.7 crore to Rs 37.5 crore.

The bridge from operating earnings to net profit changed in H1FY27. Other income declined to Rs 7.4 crore from Rs 9.2 crore, depreciation increased to Rs 19.5 crore from Rs 16.2 crore, and finance cost rose to Rs 2.7 crore from Rs 2.3 crore. Earnings before interest and tax declined 1.9% to Rs 53.7 crore, profit before tax decreased 2.8% to Rs 51 crore, and tax expense rose to Rs 13.5 crore from Rs 10.8 crore.

How did Rishabh’s consolidated margins change in H1FY27?

Rishabh’s consolidated gross margin declined to 60.4% in H1FY27 from 62.9% in H1FY26, a contraction of 250 basis points that the presentation attributes to a change in product mix. Cost of goods sold rose to Rs 162.9 crore from Rs 143.6 crore, while gross profit increased 2.1% to Rs 248.1 crore from Rs 243.1 crore.

Adjusted EBITDA increased 9.5% to Rs 71.8 crore in H1FY27 from Rs 65.6 crore, and adjusted EBITDA margin rose 50 basis points to 17.5% from 17.0%. The adjusted measure excludes employee stock option plan costs, Stock Appreciation Rights (SAR) and withholding tax, or WHT. H1FY27 included Rs 3.6 crore of employee stock option plan costs and SAR, and a Rs 2.5 crore one-time WHT provision.

Reported EBITDA margin was 16.0% in both half-year periods, although the presentation records a 10-basis-point increase before rounding. Below EBITDA, the EBIT margin fell 110 basis points to 13.1% and PAT margin declined 170 basis points to 9.1%. Thus, adjusted EBITDA growth of 9.5% was followed by a 10.1% fall in reported PAT.

Which Rishabh segments drove and constrained H1FY27 results?

Rishabh’s Electrical and Electronic Instruments (EEI) segment drove H1FY27 revenue growth, with revenue increasing 29.3% to Rs 325.5 crore from Rs 251.7 crore. Adjusted EBITDA rose 29.9% to Rs 75 crore from Rs 57.8 crore, while adjusted EBITDA margin increased 10 basis points to 23.1%. The presentation identifies EEI as contributing about 79% of consolidated revenue.

Rishabh’s High Pressure Die Casting (HPDC) segment moved in the opposite direction in H1FY27. Revenue declined 36.6% to Rs 85.5 crore from Rs 134.9 crore, while adjusted EBITDA changed from a Rs 7.8 crore profit to a Rs 3.2 crore loss. The segment’s adjusted EBITDA margin was negative 3.8%, compared with positive 5.8% in H1FY26.

The Q2FY27 comparison shows differing margin movements across the two segments. EEI revenue increased 24.9% to Rs 171.6 crore, but adjusted EBITDA margin declined 430 basis points year on year to 21.5%. HPDC revenue fell 30.1% to Rs 41.2 crore and its adjusted EBITDA loss was Rs 0.4 crore, compared with a Rs 0.1 crore loss in Q2FY26. Management says it is prioritising sustainable profitability over volume in HPDC.

What changed in Rishabh’s second-quarter consolidated earnings?

Rishabh’s Q2FY27 consolidated PAT fell 17.9% to Rs 18.1 crore from Rs 22.1 crore despite revenue growth of 8.4% to Rs 212.8 crore. Gross profit increased 2.3% to Rs 124.4 crore, while gross margin declined 350 basis points to 58.5%. Reported EBITDA decreased 2.8% to Rs 32.4 crore and its margin fell 180 basis points to 15.2%.

The Rs 2.5 crore WHT provision was recorded in Q2FY27 and represents the full H1FY27 provision. Adjusted EBITDA before employee stock option plan costs, SAR and WHT increased 3.4% to Rs 36.5 crore, but reported EBITDA was lower after Rs 1.6 crore of employee stock option plan costs and SAR, plus the WHT charge. Depreciation increased to Rs 10 crore from Rs 8.7 crore, finance cost rose to Rs 1.8 crore from Rs 1.1 crore, and other income declined to Rs 3.8 crore from Rs 4.9 crore.

Rishabh’s Q2FY27 PAT margin was 8.5%, down from 11.2% in Q2FY26. The H1FY27 PAT margin of 9.1% was above the second-quarter level but below the 10.8% recorded in H1FY26. Over the half year, EEI revenue rose 29.3%, while HPDC revenue declined 36.6% and the segment reported a Rs 3.2 crore adjusted EBITDA loss.

Conclusion

Rishabh’s H1FY27 figures show revenue and adjusted EBITDA expansion alongside a contraction in reported profit. EEI added Rs 73.8 crore of revenue and Rs 17.2 crore of adjusted EBITDA year on year, while HPDC lost Rs 49.4 crore of revenue and moved to a Rs 3.2 crore adjusted EBITDA loss. At the consolidated level, the Rs 2.5 crore WHT provision, lower gross margin, higher depreciation, finance cost and tax coincided with the 10.1% PAT decline.

The next disclosed operating milestone is HPDC’s profitability objective for FY27. Management expects HPDC to remain breakeven at adjusted EBITDA for full FY27 and says it expects the business to reach adjusted EBITDA breakeven by the end of FY27. Management’s stated priorities for the remainder of FY27 include improved product mix, new products in energy meters, medium-voltage products, automation and solar inverters, and geographic expansion across the US, Africa and Southeast Asia.