Veranda Q2 PAT reaches Rs 13.4 crore after a tax credit

Veranda reported Rs 13.4 crore profit after tax (PAT) from continuing operations in Q2FY27, following nil profit before tax before exceptional items and a matching Rs 13.4 crore tax credit; finance cost fell 58% year on year to Rs 4.8 crore.

What drove Veranda's Q2FY27 profit?

Veranda's Rs 13.4 crore Q2FY27 PAT from continuing operations was driven by a Rs 13.4 crore tax credit, as profit before tax before exceptional items was nil. Tax expense was negative Rs 13.4 crore, and reported PAT after exceptional items was also Rs 13.4 crore because the exceptional-item line for continuing operations was nil.

The prior-year reported result is not directly comparable because Q2FY26 included a one-time, non-cash exceptional gain of Rs 133.4 crore. Before exceptional items, Veranda recorded a Rs 12.8 crore loss in Q2FY26; after the gain, reported PAT was Rs 120.5 crore. The presentation therefore shows a move from a pre-exceptional loss to profit, while identifying the Q2FY27 tax credit as central to the result.

For the first half, or H1FY27, Veranda reported Rs 25.6 crore PAT before exceptional items, compared with a Rs 24.5 crore loss in H1FY26. H1FY27 tax expense was negative Rs 20.5 crore, against a Rs 5.2 crore tax expense a year earlier, while reported PAT was Rs 25.6 crore versus Rs 108.9 crore after the prior-year exceptional gain.

How did Veranda's Q2FY27 revenue and EBITDA change?

Veranda increased Q2FY27 revenue from operations by 17% year on year to Rs 50.6 crore and earnings before interest, tax, depreciation and amortisation (EBITDA) by 28% to Rs 12.7 crore. EBITDA margin increased to 25% from 23%, while gross profit rose 12% to Rs 28.2 crore and gross-profit margin fell to 56% from 58%.

The quarter recorded lower revenue than Q1FY27 but higher EBITDA. Revenue declined 5% sequentially from Rs 53.5 crore, and gross profit declined 1% from Rs 28.4 crore. EBITDA nevertheless rose 8% from Rs 11.7 crore, with the EBITDA margin increasing from 22% in Q1FY27 to 25% in Q2FY27.

Cost and income movements were mixed in Q2FY27. Advertising and business-promotion expense rose 39% year on year to Rs 4.0 crore, and other expenses rose 11% to Rs 10.1 crore. Corporate costs fell 14% to Rs 3.1 crore, while other income increased 145% to Rs 1.8 crore from Rs 0.8 crore.

In H1FY27, revenue rose 34% to Rs 104.1 crore from Rs 77.7 crore and EBITDA increased 39% to Rs 24.4 crore from Rs 17.6 crore. EBITDA margin remained 23% in both half-year periods, although gross-profit margin declined to 54% from 60%.

Which Veranda segment led Q2FY27 operating growth?

Veranda's Government Test Prep segment led the Q2FY27 operating increase, with revenue rising to Rs 43.4 crore from Rs 33.0 crore and EBITDA rising to Rs 10.7 crore from Rs 6.0 crore. Management said the segment's revenue increased 31% and its EBITDA increased 79% year on year.

Academic revenue declined to Rs 6.8 crore in Q2FY27 from Rs 7.0 crore in Q2FY26, while Academic EBITDA increased to Rs 6.3 crore from Rs 5.0 crore. The segment EBITDA figures total more than group EBITDA of Rs 12.7 crore, so the presentation does not provide a direct reconciliation between segment and consolidated EBITDA.

Government Test Prep opened two centres at Tenkasi and Dharmapuri and a new PV at Coimbatore in Tamil Nadu. Veranda also disclosed a partnership with Dr.Rajkumar Academy of Civil Services, with centres planned in Mysuru and Kalaburagi, Karnataka; its RACE platform has more than 40 centres across South India.

How much did Veranda's finance burden change?

Veranda reduced Q2FY27 finance cost by 58% to Rs 4.8 crore from Rs 11.5 crore in Q2FY26. Rent under Indian Accounting Standard (Ind AS) also declined 58% to Rs 2.3 crore from Rs 5.5 crore, while depreciation rose 21% to Rs 2.1 crore from Rs 1.8 crore.

The sequential comparison differed, as Q2FY27 finance cost was 11% above Q1FY27's Rs 4.3 crore. Profit before tax before exceptional items declined to nil from Rs 5.0 crore in Q1FY27, while share from associate changed to a Rs 3.5 crore loss from a Rs 1.9 crore gain.

For H1FY27, finance cost declined 59% to Rs 9.1 crore from Rs 22.2 crore and Ind AS rent fell 56% to Rs 4.8 crore from Rs 11.0 crore. Pre-exceptional profit before tax was Rs 5.0 crore, compared with a Rs 19.2 crore loss in H1FY26.

What does the Commerce demerger change for Veranda?

Veranda's continuing-operations results exclude the discontinued Commerce business, which contributed Rs 31.36 crore PAT during two months of Q2FY27 before demerger completion. Together with Rs 21.69 crore in Q1FY27, Commerce reported Rs 53.05 crore PAT for the five months ended August 2026, against its disclosed full-year PAT guidance of Rs 110 crore.

The National Company Law Tribunal sanctioned the Commerce demerger on August 20, 2026, and it became effective on August 31, 2026. Veranda disclosed an October 6, 2026 record date and a November 5, 2026 information memorandum, with each Veranda shareholder due to receive one share in J.K.Shah Commerce Education Limited for every Veranda share.

The presentation also says the consolidated financial statements recognised a one-time Rs 1,047 crore item from fair valuation of the demerged Commerce business during the quarter. This item is separate from the continuing-operations table, where the Q2FY27 exceptional-item line is nil.

Conclusion

Veranda's continuing operations delivered 17% Q2FY27 revenue growth and a 28% EBITDA increase to Rs 12.7 crore, while finance cost declined by Rs 6.7 crore year on year. However, the Rs 13.4 crore PAT followed nil pre-exceptional profit before tax and a matching tax credit, and the Rs 120.5 crore Q2FY26 reported PAT included a Rs 133.4 crore exceptional gain.

Next, management's disclosed FY27E revenue targets are Rs 141 crore for Government Test Prep and Rs 35 crore for Managed Schools. Veranda also plans admissions for Veranda Sprouts in January 2027 and has set a target of more than 30 schools by FY30.