Scoda Tubes H1 FY27 profit halves as EBITDA margin falls 343 bps

Scoda Tubes Limited reported H1 FY27 profit after tax of Rs 10.0 crore, down 52.3% year on year, as its EBITDA margin fell 343 basis points to 11.6% despite revenue rising 12.6% to Rs 273.3 crore and gross profit margin increasing to 32.8%.

What did Scoda Tubes report for H1 FY27?

Scoda Tubes reported higher H1 FY27 revenue and gross profit but lower operating profit and net profit. Revenue from operations increased to Rs 273.3 crore from Rs 242.7 crore in H1 FY26, while gross profit rose 15.9% to Rs 89.6 crore. Earnings before interest, taxes, depreciation and amortization, or EBITDA, declined 13.0% to Rs 31.8 crore, and profit after tax, or PAT, fell to Rs 10.0 crore from Rs 21.1 crore.

Scoda Tubes generated cash flow from operations of Rs 53.4 crore in H1 FY27, compared with negative Rs 51.0 crore in H1 FY26. Debtor days reduced to 91 from 97 in FY26, while the cash conversion cycle reduced to 164 days from 211 days in FY26. These working-capital measures improved even as H1 EBITDA and PAT declined.

Why did Scoda Tubes’ EBITDA margin fall despite higher gross margin?

Scoda Tubes’ gross-margin improvement did not carry through to operating profitability. Gross profit margin increased 93 basis points to 32.8% in H1 FY27 from 31.8% in H1 FY26, but EBITDA margin declined 343 basis points to 11.6% from 15.1%. EBITDA was Rs 31.8 crore on revenue of Rs 273.3 crore, compared with Rs 36.5 crore on Rs 242.7 crore a year earlier.

Management said the Q2 FY27 operating environment included intensifying competition from private players and elevated power, fuel and freight costs. The presentation does not provide a line-by-line H1 FY27 reconciliation for these costs. Management said its priorities are improving operational efficiencies, optimising costs and strengthening Scoda Tubes’ competitive position.

How much did Scoda Tubes’ net margin contract in H1 FY27?

Scoda Tubes’ PAT margin contracted 500 basis points to 3.7% in H1 FY27 from 8.7% in H1 FY26. PAT fell 52.3% to Rs 10.0 crore, a larger decline than the 13.0% reduction in EBITDA to Rs 31.8 crore. The presentation does not disclose the separate H1 changes in depreciation, finance costs or tax between EBITDA and PAT.

Scoda Tubes reported return on equity of 6.9% on a trailing 12-month basis, compared with 9.9% in FY26. Net debt to equity was 0.4 times in H1 FY27 versus 0.3 times in FY26. The disclosed comparison shows a 0.1-times increase in the leverage ratio alongside lower return on equity and PAT margin.

Did exports offset weaker domestic revenue for Scoda Tubes?

Exports offset the decline in domestic revenue and formed a larger share of Scoda Tubes’ H1 FY27 sales. Domestic revenue declined 6.6% to Rs 160.4 crore from Rs 171.8 crore in H1 FY26, while exports increased 59.4% to Rs 112.9 crore from Rs 70.8 crore. Export mix rose to 41% from 29%, while domestic mix fell to 59% from 71%.

The same pattern appeared in Q2 FY27, when total revenue rose 2.6% to Rs 148.9 crore. Domestic Q2 revenue fell 11.6% to Rs 93.8 crore, whereas exports grew 41.6% to Rs 55.1 crore. Domestic sales represented 63% of Q2 FY27 revenue, down from 73% in Q2 FY26, and export share rose to 37% from 27%.

How did Scoda Tubes perform in Q2 FY27 and what is its plan?

Scoda Tubes’ Q2 FY27 profitability declined faster than its H1 result, with PAT down 65.7% to Rs 4.8 crore. Quarterly revenue from operations was Rs 148.9 crore, up 2.5% from Rs 145.3 crore in Q2 FY26, while EBITDA declined 29.3% to Rs 15.8 crore from Rs 22.3 crore. Q2 EBITDA margin fell 478 basis points to 10.6%, and PAT margin fell 640 basis points to 3.2%.

Management said it remains confident of achieving FY27 revenue growth of 20% to 25%, supported by its order pipeline, expanding manufacturing capabilities and execution. It did not provide specific margin guidance, saying its priority is to protect current margins and progressively build them through efficiencies and operating leverage. Management said solar power capacity for seamless operations is operational and trial production at the expanded welded facility remains scheduled for Q4 2027, alongside commissioning of dedicated solar capacity.

Conclusion

Scoda Tubes’ H1 FY27 results show that export-led revenue growth and a 93-basis-point increase in gross margin did not prevent lower operating and net profitability. Revenue rose 12.6% to Rs 273.3 crore and exports rose 59.4% to Rs 112.9 crore, but EBITDA margin fell to 11.6% and PAT more than halved to Rs 10.0 crore. The Q2 EBITDA-margin decline of 478 basis points indicates that margin pressure continued during the second quarter.

The next disclosed measures to watch are management’s FY27 revenue-growth expectation of 20% to 25% and trial production at the expanded welded facility in Q4 2027. Management has not given a margin target, leaving its stated plan to protect current margins through cost optimisation, operational efficiencies and operating leverage as the key unresolved matter. The domestic and export revenue mix will also remain relevant, after domestic H1 revenue fell 6.6% while exports rose 59.4%.