Shri Techtex H1 revenue rose 146% as margins compressed

Shri Techtex Limited reported H1 FY27 revenue of Rs 90.92 crore, up 146% year on year, driven by higher polymer prices, freight pass-through and sales volumes; net profit rose 130% to Rs 13.90 crore, although EBITDA margin fell to 22.3% from 26.8% in H1 FY26.

Why did Shri Techtex revenue rise 146% in H1 FY27?

Shri Techtex revenue rose 146% year on year because polymer prices increased by as much as 50% after the Iran conflict, higher freight was passed on in selling prices, and sales volumes were strong. Revenue from operations reached Rs 90.92 crore in H1 FY27, compared with Rs 36.99 crore in H1 FY26 and Rs 47.14 crore in H2 FY26.

The H1 FY27 revenue total also exceeded the Rs 84.13 crore reported for all of FY26. This means the first six months of FY27 generated Rs 6.79 crore more revenue than the preceding full year, but the presentation identifies price and freight movements alongside volume as reasons for the increase, rather than attributing the rise solely to unit sales.

Revenue was 93% above H2 FY26, a sequential comparison that also reflects the higher polymer-price environment described by management. The company said revenue would ease if polymer prices normalise, showing that reported sales in H1 FY27 included a price-linked component that may not continue at the same level.

How did higher sales translate into H1 FY27 profit?

Shri Techtex net profit increased 130% to Rs 13.90 crore in H1 FY27 because high sales volumes and inventory purchased before polymer prices rose supported profit. Net profit was Rs 6.04 crore in H1 FY26 and Rs 13.25 crore in H2 FY26, while profit before tax reached Rs 19.00 crore, up 134% year on year.

The profit increase was smaller on a sequential basis than the revenue increase. Revenue rose 93% from Rs 47.14 crore in H2 FY26 to Rs 90.92 crore in H1 FY27, whereas net profit rose 5% from Rs 13.25 crore. The presentation links this difference to the effect of passing higher input and freight costs through revenue, which increased the sales denominator used in margin calculations.

Total income was Rs 92.75 crore in H1 FY27, including Rs 1.83 crore of other income, while total expenses were Rs 73.75 crore. Other income fell 45% from Rs 3.32 crore in H1 FY26, so the increase in profit occurred despite a lower contribution from that line item.

Basic and diluted earnings per share were Rs 5.57 in H1 FY27, compared with Rs 2.42 in H1 FY26 and Rs 5.31 in H2 FY26. The presentation reports a face value of Rs 10 per share, while describing the H1 FY27 and H1 FY26 figures as unaudited.

Why did Shri Techtex margins decline despite higher profit?

Shri Techtex margins declined because materials and traded goods absorbed 65.3% of revenue in H1 FY27, versus 52.8% in H1 FY26, after the rise in polymer prices. Gross margin consequently fell to 34.7% from 47.2%, even as the company sold previously acquired lower-cost stock at newer selling prices.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased to Rs 20.29 crore from Rs 9.92 crore, but EBITDA margin decreased to 22.3% from 26.8%. Shri Techtex calculates EBITDA as profit before tax plus finance costs and depreciation, and the margin was also below the 39.8% recorded in H2 FY26, when EBITDA was Rs 18.78 crore on lower revenue of Rs 47.14 crore.

Net margin fell to 15.3% in H1 FY27 from 16.3% a year earlier and 28.1% in H2 FY26. Shri Techtex states that cost pass-through dilutes margin ratios even while rupee profit rises, because the higher cost of polymer and freight is reflected in reported revenue.

What role did inventory and overheads play in Shri Techtex profit?

Shri Techtex benefited from low-cost inventory because stock bought before the polymer-price increase was sold at higher current prices in H1 FY27. That mechanism supported the Rs 13.90 crore net profit alongside higher volumes, despite materials and traded-goods costs rising sharply as a share of sales.

The presentation also attributes operating leverage to flat fixed costs. Other expenses declined to 13.3% of revenue in H1 FY27 from 26.5% in H1 FY26, employee costs fell to 1.1% from 2.8%, and depreciation declined to 1.3% from 3.2% of revenue.

Finance costs were Rs 10 lakh in H1 FY27, compared with Rs 61 lakh in H1 FY26, a decline of 84%. As a share of revenue, finance costs were 0.1%, down from 1.6%, while depreciation was unchanged in absolute terms at Rs 1.19 crore in both half years.

These cost movements show two separate effects in the H1 FY27 result: the cost of materials rose with polymer prices, while overhead categories formed a lower percentage of a much larger revenue base. The presentation does not quantify how much of the profit increase came from each effect, but it specifically identifies both low-cost inventory and flat fixed costs.

What has Shri Techtex planned for H2 FY27?

Shri Techtex plans to keep passing through input costs while polymer prices remain volatile, while proposing new manufacturing capacity, additional domestic and export customers, and a new product launch. Management also says revenue will ease if polymer prices normalise, making the trajectory of pass-through a disclosed H2 FY27 variable.

The company ended 30 September 2026 with net worth of Rs 131.74 crore, up from Rs 117.84 crore at 31 March 2026. It reported paid-up equity of Rs 24.95 crore and reserves of Rs 106.79 crore, with H1 FY27 profit retained in reserves before any dividend.

Book value per share was Rs 52.80 at 30 September 2026, compared with a Rs 10 face value. The planned capacity, customer additions and product launch are forward-looking proposals, and the presentation states that actual results may differ.

Conclusion

Shri Techtex’s H1 FY27 result combined a 146% revenue increase to Rs 90.92 crore with a 130% rise in net profit to Rs 13.90 crore. Higher polymer prices, freight pass-through, strong volumes and low-cost inventory all contributed, while the materials share of revenue increased and EBITDA margin declined to 22.3%.

The next disclosed factors to watch are polymer-price volatility and management’s ability to continue cost pass-through in H2 FY27, since the company says revenue would ease if prices normalise. Progress on proposed manufacturing capacity, domestic and export customer additions, and a new product launch will also determine how much future growth comes from the stated expansion plan rather than pricing effects.