V-MARC India Q1 FY27: Scale-up quarter, but margins stayed under pressure

V-MARC India opened FY27 with its strongest first quarter so far. Consolidated revenue from operations doubled year on year to Rs 555.5 crore in Q1 FY27 from Rs 274.4 crore in Q1 FY26. EBITDA rose 95.3 percent to Rs 59.4 crore and profit after tax increased 163.3 percent to Rs 28.5 crore.

The quarter was a clear reminder of what operating leverage can do when volumes rise quickly. But it also showed where the stress points are. Gross margin compressed sharply to 19.6 percent versus 23.1 percent a year ago. Even with that, EBITDA margin only slipped 40 basis points to 10.7 percent, supported by scale benefits. PAT margin improved to 5.1 percent from 3.9 percent, helped by higher other income and improved finance cost as a share of revenue, even as absolute finance cost rose.

Where growth came from: building wires led, exports started contributing

The revenue mix shifted meaningfully in Q1 FY27. Building Wires and Industrial Cables surged to Rs 246.6 crore from Rs 69.2 crore, a 256.5 percent year-on-year increase. HT cables grew 70.2 percent to Rs 236.8 crore, while LT cables grew 9.0 percent to Rs 72.1 crore.

On the customer side, the business remained broad-based across channels. B2G (government) revenue increased to Rs 188.7 crore from Rs 117.2 crore. B2B (EPC) rose to Rs 228.0 crore from Rs 119.1 crore, and B2C (dealer network) nearly doubled to Rs 76.0 crore from Rs 38.1 crore. Exports were a new contributor in Q1 FY27 at Rs 62.8 crore.

Management framed the quarter as evidence that scale is now translating into earnings. It also highlighted deeper distribution, growth in exports, and sustained brand investment alongside product launches in building wires and industrial cables.

Profitability: operating leverage helped, but input costs bit into gross margin

The P and L shows the trade-off clearly. Gross profit increased to Rs 108.8 crore from Rs 63.3 crore, but the gross margin decline suggests input costs moved unfavourably relative to pricing.

Operating expenses grew slower than revenue. Employee benefits increased to Rs 20.9 crore from Rs 14.4 crore, and other expenses rose to Rs 28.5 crore from Rs 18.5 crore. Total operating expenses were Rs 49.4 crore, up 50.2 percent, far below the 102.4 percent revenue growth. That gap is what kept EBITDA expanding even as gross margins compressed.

Finance cost increased 54.8 percent year on year to Rs 15.9 crore. Even so, management commentary stated that PAT margin expansion was supported by improved finance cost as a percentage of revenue and a lower tax rate.

Longer-term track record: FY26 was a breakout year

The quarterly momentum is built on a steep multi-year ramp. Consolidated revenue from operations increased to Rs 1,797.31 crore in FY26 from Rs 904.87 crore in FY25. EBITDA rose to Rs 202.24 crore from Rs 97.13 crore, and PAT increased to Rs 98.78 crore from Rs 36.09 crore.

Return ratios have also moved up. The presentation reports FY26 ROCE at 35.0 percent and ROE at 34.6 percent, with debt to equity at 0.7. Working capital days in FY26 were shown as payable days 88, inventory days 54 and debtor days 85.

A separate point investors will note is cash flow. Net cash from operating activities was Rs 116.34 crore in FY26 versus Rs 22.53 crore in FY25, while investing cash flow was negative at Rs 102.18 crore in FY26, consistent with ongoing capacity and asset build-out.

Strategy and outlook: FY27 targets, FY30 capacity ambition, export push

Management provided explicit guidance for FY27. The company targets revenue growth of 40 percent plus for FY27, with growth expected across B2G, B2B, B2C and exports. It also guided to an EBITDA margin band of 11 to 12 percent for FY27, broadly in line with the 11.2 percent delivered in FY26.

The longer-term capacity plan is more aggressive. The company stated a vision to scale installed capacity to over 10 lakh circuit kilometres by FY30, about five times the current installed base of 2.12 lakh circuit kilometres, backed by an incremental capex programme of about Rs 500 crore through FY30.

Exports are expected to be a key pillar of the next phase. FY26 was described as the maiden year of exports with revenue contribution of Rs 62.6 crore. Management plans to expand into new geographies, particularly Europe, USA and MENA countries, supported by a dedicated export team at the Mumbai office and participation in 6 to 10 international exhibitions in FY27.

Corporate actions and governance signals: bonus issue and higher borrowing limits

Two corporate developments stood out in the July 2026 board outcome.

First, the company allotted bonus shares in the ratio of 5:1. Paid-up equity share capital increased from 2,44,20,696 equity shares to 14,65,24,176 equity shares.

Second, the board approved the constitution of a Risk Management Committee with immediate effect. It also approved proposals, subject to shareholder approval, to enhance limits under Section 180(1)(a) and 180(1)(c) of the Companies Act, 2013 from Rs 600 crore to Rs 800 crore for creation of charge and borrowing limits.

These actions do not directly change operating performance, but they indicate the company is preparing balance sheet headroom for a larger capex and working capital requirement as scale expands.

What to track from here

V-MARC has entered FY27 with strong volume momentum, particularly in building wires and industrial cables, and with exports now visible in quarterly numbers. The core question for the rest of the year is how well the company can protect gross margins while keeping the growth engine running.

Management has guided to 11 to 12 percent EBITDA margin for FY27 and revenue growth of more than 40 percent. If the company can execute its capacity ramp without letting leverage and working capital risks rise faster than cash flows, the FY30 capacity ambition and export expansion plan could materially change its scale and market positioning over the next few years.