Sugs Lloyd Q2 revenue doubles but material costs cut margin

SUGS LLOYD reported Q2 FY27 revenue of Rs 134.91 crore, up 112.1% year on year, after deferred Patna project billing was realised. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to Rs 19.01 crore, but its margin declined 158 basis points to 14.1% as material costs increased faster than revenue.

Why did Sugs Lloyd’s Q2 revenue rise 112%?

Sugs Lloyd’s Q2 FY27 revenue rose because billing deferred on the Patna project was realised during the quarter ended 30 September 2026. Revenue from operations was Rs 134.91 crore, compared with Rs 63.62 crore in Q2 FY26 and Rs 78.40 crore in Q1 FY27. Management said June billing on the Patna project had been held back by start-up and supplier delays before coming through in Q2.

The resulting revenue increase was 112.1% year on year and 72.1% quarter on quarter. In H1 FY27, revenue reached Rs 213.30 crore, 73.4% above Rs 123.00 crore in H1 FY26. The half-year total was 71% of FY26 revenue of Rs 300.70 crore, according to the standalone presentation.

The revenue mix also shifted towards transmission and distribution (T&D) and smart-grid work. T&D and smart grid represented 92% of Q2 FY27 revenue, against 59% in Q1 FY27 and 46% in FY26. Solar engineering, procurement and construction (EPC) revenue was Rs 10.20 crore in Q2 FY27, down from Rs 32.00 crore in Q1 FY27, while civil and other work contributed Rs 0.03 crore.

How did material costs reduce Sugs Lloyd’s EBITDA margin?

Sugs Lloyd’s EBITDA margin declined because material costs reached 65.1% of Q2 FY27 revenue, compared with 55.3% in Q2 FY26. Cost of materials increased 149.7% year on year to Rs 87.79 crore, exceeding the 112.1% revenue increase. EBITDA therefore rose 90.7% to Rs 19.01 crore, while margin fell to 14.1% from 15.7%.

The quarter-on-quarter comparison showed the same cost movement. Materials cost increased 176.8% from Rs 31.72 crore in Q1 FY27, while revenue increased 72.1%, and EBITDA margin declined from 15.3%. Total operating expense was 85.9% of Q2 revenue, compared with 84.3% a year earlier; employee benefit expense rose 65.0% to Rs 12.06 crore.

For H1 FY27, EBITDA was Rs 31.00 crore, up 64.2% from Rs 18.90 crore in H1 FY26, while EBITDA margin was 14.5% versus 15.3%. The presentation linked the 81-basis-point H1 margin reduction to the material mix. A basis point is one-hundredth of a percentage point.

Did lower finance costs limit the net-margin decline?

Sugs Lloyd’s lower finance-cost ratio partly limited the decline in profit after tax (PAT) margin. Finance cost increased 42.1% in absolute terms to Rs 3.44 crore in Q2 FY27, but declined to 2.5% of revenue from 3.8% in Q2 FY26 because revenue rose faster. Profit before tax increased 104.9% to Rs 16.64 crore and PAT increased 107.5% to Rs 12.51 crore.

PAT margin nevertheless eased to 9.3% from 9.5% in Q2 FY26 and 9.6% in Q1 FY27. Tax rose 97.6% year on year to Rs 4.13 crore, while other income increased 70.6% to Rs 1.16 crore. Earnings per share rose 63.3% to Rs 5.39, less than PAT growth because Q2 FY27 earnings were calculated on 2.32 crore shares following IPO dilution.

At the H1 level, finance cost was 2.8% of revenue, compared with 3.2% in H1 FY26. H1 PAT increased 69.3% to Rs 20.00 crore from Rs 11.80 crore, but PAT margin was 9.4%, down 22 basis points from 9.6%. The lower finance-cost share thus offset part of the operating-cost change without preserving the prior-year margin.

What does Sugs Lloyd’s order book show about execution needs?

Sugs Lloyd’s order book stood at Rs 1,067 crore on 30 September 2026, equal to 3.5 times FY26 revenue of Rs 300.70 crore. Q2 order inflow was Rs 395 crore excluding goods and services tax (GST) across seven orders; the company separately disclosed Rs 466 crore including GST to BSE. The order book was 2.6 times the Rs 409 crore reported on 30 September 2025.

The awards included a Revamped Distribution Sector Scheme (RDSS) project for Punjab State Power Corporation in Faridkot and Gurdaspur circles. Sugs Lloyd also received letters of intent for Tata Power Odisha distribution-company work, including Rs 214 crore for TPSODL and TPWODL on 31 August and Rs 24.60 crore for TPCODL maintenance on 2 September. Timeline values include GST, and management said the mandates expanded its distribution-reform work beyond Bihar.

Order growth coincided with higher funding and working-capital balances. Gross debt rose to Rs 163.10 crore on 30 September 2026 from Rs 68.90 crore on 31 March 2026, and debt to equity increased to 1.04 times from 0.50 times. Trade receivables were Rs 190.81 crore and bank-guarantee margin money was Rs 92.47 crore at the September date.

What products and markets does Sugs Lloyd plan to add?

Sugs Lloyd plans to launch compact fault passage indicators (FPIs) in Q3 FY27 and is developing vacuum circuit breakers (VCBs) and ring main units (RMUs). Management also identified transmission, supervisory control and data acquisition (SCADA), and battery energy storage systems (BESS) as expansion areas. The company recorded an FPI and SCADA order from MP Paschim on 2 July 2026.

The company set up Sugs Renewables Pvt Ltd on 21 August 2026 and disclosed a 2-megawatt solar project at the Golden Temple worth Rs 8.90 crore on 28 September. Management said its operating priorities were accelerating execution, improving cash flows and converting opportunities into revenue. Those priorities accompany the Rs 94.10 crore H1 increase in gross borrowings, described as mostly short-term.

Management had stated on its 31 July 2026 Q1 FY27 call that its debt-to-equity ceiling was 1.1 to 1.2 times and that no equity raise was planned in FY27 or FY28. It identified surety bonds in place of bank guarantees, Trade Receivables Discounting System financing and purchase-bill discounting as funding levers. The reported 1.04-times debt-to-equity ratio at 30 September was below that stated range.

Conclusion

Sugs Lloyd’s Q2 FY27 result combined a billing-led rise in revenue with a higher material-cost share. Deferred Patna billing lifted quarterly revenue to Rs 134.91 crore and PAT to Rs 12.51 crore, while materials at 65.1% of revenue reduced EBITDA margin to 14.1% from 15.7% a year earlier. Finance cost as a proportion of revenue declined, limiting the PAT-margin reduction to 20 basis points.

What to watch next is execution of the Rs 1,067 crore order book alongside management’s stated 1.1 to 1.2-times debt-to-equity ceiling. Disclosed milestones include the planned Q3 FY27 compact-FPI launch, continuing VCB and RMU development, and delivery of the Punjab RDSS and Tata Power Odisha network operation and maintenance mandates.