AVG Logistics Q2 FY27 Profit Jumps 40% as Cost Discipline Offsets Slower Revenue Growth
The logistics firm posted a 39.6% rise in Q2 net profit, driven by sharply lower depreciation and interest costs, even as revenue grew a modest 6%.
AVG Logistics reported a 39.6% jump in Q2 net profit to ₹7.09 crore, significantly outpacing a 6% revenue increase. The profit surge was powered by a steep fall in depreciation and interest expenses, though operating profit declined.
For logistics companies, the ability to manage costs often matters more than chasing top-line growth in a competitive market. AVG Logistics demonstrated this in the September quarter, delivering a sharp profit jump from a modest revenue increase.
The numbers tell a story of two diverging trends. Revenue rose 6% year-on-year to ₹151.62 crore, while net profit surged 39.6% to ₹7.09 crore. The net profit margin expanded 110 basis points to 4.7%.
Revenue & profit
Revenue (₹ Cr)
Net Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 (Sep '26) | PreviousQ1 FY27 (Jun '26) |
|---|---|---|
| Revenue (₹ Cr) | 151.62 | 132.48 |
| Net Profit (₹ Cr) | 7.09 | 6.46 |
| Net Profit Margin | 4.7% | 4.9% |
The engine behind the profit surge
Profit growth was driven by a significant reduction in non-cash and financing charges. Depreciation expense fell 40.7% year-on-year, a drop of ₹4.75 crore, according to MarketPing. Interest costs also declined 18.5%.
This provided a substantial lift to profit before tax, which rose 54.5%. The company also benefited from a 31.5% rise in other income. However, operating profit, as reported by Univest, declined 13.6% to ₹20.97 crore, indicating underlying operational pressure.
A mixed demand environment
The 14.4% sequential revenue growth from a low Q1 base was led by the core freight segment, notes ScanX. Yet, the broader trucking market remains challenging. A Crisil report cited by Agrospectrum India shows freight rates softened in April 2026 due to weak cargo demand and fleet oversupply.
This environment makes AVG's new contract wins critical. The company secured a five-year, ₹60 crore transportation deal from a multinational beverage firm in early November, as per an Alfafinder filing. Such dedicated contracts offer revenue visibility in a volatile market.
The cash flow catch
Efficiency gains did not translate into cash. ScanX reports operating cash flow was negative ₹20.41 crore for the half-year, driven by a sharp ₹26.32 crore increase in trade receivables. This working capital drag is a key monitorable as the company grows.
Borrowings have also risen to ₹187.71 crore from ₹153.41 crore a year ago, per MarketPing. The debt-to-equity ratio stands at 0.67, a balance sheet fact investors weigh against the reported profit growth.
Key Points
- Net profit jumped 39.6% year-on-year, far outpacing 6% revenue growth, due to a steep fall in depreciation and interest costs.
- Operating profit declined 13.6%, highlighting a divergence between reported bottom-line strength and core operating performance.
- The company secured a new ₹60 crore, five-year contract, providing revenue visibility amid a soft freight pricing environment.
- Negative operating cash flow and rising receivables point to working capital pressures that could strain liquidity.
Hexa Perspective
The quarter shows AVG Logistics can boost profitability through financial engineering and cost control. The sustainability of this model is less clear. The sharp decline in depreciation is a one-time tailwind that will not repeat, and operating margins are under pressure.
The path forward hinges on converting new order wins like the beverage contract into consistent, high-quality earnings. Investors are weighing the reported profit jump against rising debt, weak cash generation, and a stock that has declined 18.6% over the past year.
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