Batliboi (BATLIBOI) Q2 FY27's Q2 Profit Growth Lags Record Revenue as Costs Bite
The engineering firm posted its highest-ever quarterly revenue but profit growth lagged, squeezed by rising costs and a weak performance from its core business.
Batliboi's Q2 FY27 revenue hit a record ₹147 crore, up 22% year-on-year. However, net profit grew only 9%, as total expenses rose faster than sales, compressing margins. The growth was largely driven by subsidiaries, while the parent company's core business struggled.
For Batliboi, a multi-decade engineering firm, the September quarter was a story of two halves. The consolidated group posted its highest-ever revenue, riding on strong order execution. Yet, the headline growth masked a significant squeeze on profitability and a stark divergence between its acquired businesses and its core operations.
The numbers show a clear tension. Revenue rose 21.8% year-on-year to ₹147.33 crore, while net profit grew just 8.7% to ₹6.63 crore. This pushed the net profit margin down 50 basis points to 4.5%. The sequential jump from a very weak Q1 is a low-base effect, not a sustainable trend.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 147.33YoY +22% | 125.29 | 120.94 |
| Profit (₹ Cr) | 6.63YoY +8.7% | 0.49 | 6.10 |
| Net Profit Margin | 4.5%YoY -10% | 0.4% | 5.0% |
Why the core business is under pressure
Total expenses rose 23.2% year-on-year, outpacing revenue growth. According to a report by Stockwatch, this was driven by higher material and employee costs. More telling is the standalone performance. The parent company's revenue grew a mere 5.1% and profit collapsed to near-break-even.
This reveals that the consolidated growth is being carried by subsidiaries like Quickmill and the newly acquired Penta Automation. Their inclusion also explains the 42% yearly jump in depreciation. The core machine-tools and textile machinery business is facing real margin pressure.
A strong order book meets execution questions
Management, as noted in its investor presentation, has reiterated a target of 7-8% EBITDA margin within one to two years. The current quarter's operating margin of 6.65% is a step back from 7.48% a year ago. The path to that target is the conversion of a robust ₹618 crore order backlog, which provides multi-quarter revenue visibility.
However, a report by MarketsMojo highlights persistent investor skepticism. The stock trades 39% lower over the past year, reflecting concerns over margin volatility, high leverage, and weak return metrics like a 2.89% ROE. The firm carries no formal analyst coverage, leaving the market to judge its execution.
Key Points
- Batliboi achieved record quarterly revenue of ₹147.33 crore, growing 21.8% year-on-year, but net profit growth lagged at 8.7%.
- Profitability was squeezed as total expenses rose 23.2%, faster than sales, compressing the net profit margin by 50 basis points.
- Consolidated growth is heavily reliant on subsidiary contributions, while the parent company's core business saw profit fall to near-zero.
- A strong ₹618 crore order backlog supports future revenue, but the stock's weak performance reflects market doubts over margin stability and execution.
Hexa Perspective
The quarter confirms Batliboi is a business in transition. Growth is now externally driven via acquisitions, not from its legacy operations. The ₹618 crore order book is a solid foundation, but the value created from it hinges on reversing the core margin decline.
Investors are weighing the promise of backlog conversion against the evidence of persistent cost pressure and operational volatility. Until the standalone business shows a clear path to recovery, the stock's discount to its potential is likely to persist. The next few quarters will test management's ability to deliver on its margin guidance while integrating its new assets.
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