Servotech Q2 EBITDA more than triples as margin reaches 13.98%

Servotech Renewable Power System Ltd reported Q2 FY27 consolidated EBITDA of Rs 23.6034 crore, up 216.97% from Rs 7.4466 crore a year earlier, while EBITDA margin rose to 13.98% from 6.92%. Consolidated revenue increased 56.82% to Rs 168.8276 crore and gross profit grew 84.54% to Rs 43.5983 crore.

How did Servotech’s consolidated Q2 FY27 earnings change?

Servotech’s consolidated EBITDA more than tripled in Q2 FY27, increasing to Rs 23.6034 crore from Rs 7.4466 crore in Q2 FY26. Total revenue rose by 56.82% to Rs 168.8276 crore from Rs 107.6569 crore, while gross profit grew by 84.54% to Rs 43.5983 crore from Rs 23.6255 crore. The company labels the financial statements unaudited and subject to limited review.

The quarter showed EBITDA growth ahead of sales growth. Gross margin increased by 3.87 percentage points to 25.82% from 21.95%, and EBITDA margin increased by 7.06 percentage points to 13.98% from 6.92%. Expenses excluding depreciation, amortisation and finance cost rose to Rs 19.9948 crore from Rs 16.1789 crore, while gross profit increased by Rs 19.9728 crore.

What explains Servotech’s Q2 margin expansion?

Servotech’s reported margin expansion reflects gross profit rising faster than revenue and operating expenses rising by less than the gross-profit increase in Q2 FY27. Cost of goods sold increased to Rs 125.2294 crore from Rs 84.0314 crore, whereas gross profit rose to Rs 43.5983 crore from Rs 23.6255 crore. That movement lifted gross margin to 25.82%.

At the EBITDA level, the Rs 3.8159 crore increase in expenses excluding depreciation, amortisation and finance cost was below the Rs 19.9728 crore rise in gross profit. EBITDA therefore increased by Rs 16.1568 crore year on year. The presentation provides the income-statement lines but does not assign the gross-margin increase to a particular product category or cost input.

Q2 also improved on Q1 FY27 at the margin level despite lower revenue. Consolidated revenue declined from Rs 216.2941 crore in Q1 FY27 to Rs 168.8276 crore in Q2 FY27, but EBITDA rose from Rs 20.9433 crore to Rs 23.6034 crore. Gross margin rose from 22.45% in Q1 FY27 to 25.82%, while EBITDA margin increased from 9.68% to 13.98%.

How did Servotech’s consolidated result compare with standalone earnings?

Servotech’s Q2 FY27 consolidated EBITDA of Rs 23.6034 crore was Rs 3.6262 crore above standalone EBITDA of Rs 19.9772 crore. Consolidated total revenue was Rs 168.8276 crore, compared with standalone total revenue of Rs 158.8234 crore. Consolidated EBITDA margin of 13.98% was also above the standalone margin of 12.58%.

Consolidated profit after tax was Rs 9.5421 crore in Q2 FY27, while standalone profit after tax was Rs 8.3733 crore. Servotech separately recorded Rs 20.44 lakh as its share of profit from associates, taking consolidated profit after tax and share of associates to Rs 9.7465 crore. In Q2 FY26, that combined consolidated measure was Rs 39.51 lakh.

Finance cost on a consolidated basis rose to Rs 5.3707 crore in Q2 FY27 from Rs 2.6020 crore in Q2 FY26, and depreciation and amortisation increased to Rs 5.6715 crore from Rs 4.3153 crore. After these charges, profit before tax rose to Rs 12.5612 crore from Rs 52.93 lakh. The reported consolidated profit-after-tax margin increased to 5.77% from 0.37%.

What does Servotech’s first-half performance show?

Servotech reported H1 FY27 consolidated revenue of Rs 385.1218 crore, up 57.31% from Rs 244.8223 crore in H1 FY26. H1 EBITDA rose 143.71% to Rs 44.5466 crore from Rs 18.2784 crore. The first-half EBITDA margin increased to 11.57% from 7.47%.

H1 FY27 gross profit was Rs 92.1591 crore, compared with Rs 49.6289 crore in H1 FY26, an increase of 85.70%. Gross margin increased to 23.93% from 20.27%, while expenses excluding depreciation, amortisation and finance cost rose to Rs 47.6125 crore from Rs 31.3505 crore. The Q2 EBITDA margin of 13.98% was above the H1 margin of 11.57%.

The two quarters had different revenue and cost profiles. Q2 FY27 revenue of Rs 168.8276 crore was Rs 47.4665 crore below Q1 FY27 revenue of Rs 216.2941 crore, but Q2 gross profit was only Rs 4.9626 crore below Q1 gross profit of Rs 48.5609 crore. Q2 operating expenses of Rs 19.9948 crore were below the Q1 level of Rs 27.6176 crore, resulting in higher Q2 EBITDA.

Which products made up Servotech’s Q2 FY27 revenue mix?

Servotech’s largest disclosed Q2 FY27 product category was solar plants, representing 42.54% of revenue mix. Solar inverters accounted for 27.54%, while solar panels and balance of system, or BOS, accounted for 21.41%. Together, these three solar-related categories represented 91.49% of the disclosed mix.

Electric vehicle, or EV, products represented 3.98% of Q2 FY27 mix and power products accounted for 2.79%. Other products contributed 0.92%, while annual maintenance contracts, or AMC, represented 0.82%. The presentation does not disclose revenue amounts, gross profit or margins by product category.

Management said it sees opportunities in solar energy, battery energy storage systems and EV charging infrastructure. Servotech reported more than 800 distributors and more than 6,000 retailers across more than 370 towns, with partner retention above 70%. These channel measures describe its distribution footprint rather than a sales or margin target.

Conclusion

Servotech’s Q2 FY27 result combined 56.82% consolidated revenue growth with 84.54% gross-profit growth and 216.97% EBITDA growth. The result was reflected in gross margin rising to 25.82% and EBITDA margin reaching 13.98%, while consolidated profit after tax and share of associates increased to Rs 9.7465 crore from Rs 39.51 lakh in Q2 FY26.

The next point to watch is whether the Q2 EBITDA margin of 13.98% is maintained as Servotech pursues the solar energy, battery energy storage and EV charging opportunities identified by management. Management also said several developments are in the pipeline and that it is focused on scaling responsibly, but the presentation gives no revenue target, margin target or scheduled project milestone.