Century Extrusions (CENTEXT) Q2 FY27 Profit Slips Despite a 55% Revenue Surge
The aluminium extruder's sales jumped on strong demand, but rising input and depreciation costs squeezed margins, leading to a sequential profit dip.
Century Extrusions posted a 55% YoY revenue jump to ₹170 crore in Q2 FY27, but net profit fell 4% sequentially. The margin squeeze was driven by surging material and depreciation costs, even as the company gears up for capacity expansion.
For Century Extrusions, robust demand for aluminium products is a clear win, but the cost of fulfilling those orders is testing its profitability. The company’s September quarter shows revenue surging 55% year-on-year, yet net profit slipped sequentially as expenses climbed even faster.
The numbers tell a story of top-line strength meeting a margin squeeze. Revenue reached ₹170 crore, up 23% from the June quarter. However, net profit dipped to ₹3.61 crore, down 4.2% quarter-on-quarter. The net profit margin compressed to 2.1%, down 60 basis points from Q1.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 170.00YoY +55% | 138.36 | 109.66 |
| Profit (₹ Cr) | 3.61YoY +31% | 3.77 | 2.76 |
| Net Profit Margin | 2.1%YoY -16% | 2.7% | 2.5% |
Where the money went
A report by Multibagg.ai details the cost pressures. Material costs nearly doubled year-on-year to ₹150.73 crore. Employee expenses rose 38%, while depreciation soared 88% to ₹2.09 crore. This surge is linked to the company’s ongoing capacity expansion.
Century Extrusions is in the final stages of a brownfield expansion at its Kharagpur plant, according to Cruxal. The new press, expected to start commercial production from October 2026, will add 9,000 MT of capacity. The related capital expenditure is now hitting the profit and loss statement through higher depreciation.
A cash flow crunch
Funding this growth has stretched the balance sheet. Total assets grew 29% in the half-year, driven by a ₹30 crore jump in inventory and higher receivables. Multibagg.ai notes this working capital build-up slashed operating cash flow to ₹2.25 crore, down 73% from the prior year.
Short-term borrowings rose to ₹71.20 crore. The company recently completed a ₹45 crore rights issue, partly intended to fund this expansion and repay debt, offering some financial relief ahead.
The market's muted reaction
The stock closed at ₹17.34 the day before the results, reflecting a challenging year. It trades at a P/E of 20.3, a 49% premium to the industry, as per the payload data. This valuation appears to factor in growth expectations more than current profitability.
Key Points
- Revenue growth of 55% YoY was overshadowed by a 4.2% QoQ dip in profit, highlighting severe cost pressure.
- Margin compression was driven by a near-doubling of material costs and an 88% surge in depreciation from capacity expansion.
- Operating cash flow fell 73% in H1 FY27 as working capital requirements ballooned ahead of the brownfield expansion.
- The company’s premium valuation persists despite near-term profitability challenges, banking on future capacity-led growth.
Hexa Perspective
This quarter underscores the classic growth versus margin tension. Century Extrusions is successfully riding a wave of demand, but the cost of scaling—both in raw materials and new capacity—is biting into profits now. The margin squeeze has at least another quarter to run as the new press ramps up.
The critical watchpoint is whether the added capacity, once operational, can deliver operating leverage to offset these costs. For now, the story is one of revenue potential being validated, but earnings delivery deferred.
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