Chavda Infra's Q2 FY27 profit jumped 31% sequentially as operating margins recovered. Yet revenue fell 14% from a year ago, highlighting a persistent squeeze from labour costs and uneven project billing cycles.
For Chavda Infra, the September quarter was about recovery from a sharp margin squeeze. Profit rebounded 31% from the June quarter, but revenue remained 14% below last year's level, showing the construction firm is still navigating a tough cost environment.
The numbers tell a story of sequential improvement against a weak yearly comparison. Revenue inched up 6% quarter-on-quarter to ₹89.4 crore. Profit rose more sharply to ₹5.1 crore, lifting the net profit margin to 5.7% from 4.6% in Q1.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Metric
CurrentQ2 FY27
PreviousQ1 FY27
Same quarter LYQ2 FY26
Revenue (₹ Cr)
89.35YoY -14%
84.03
104.00
Profit (₹ Cr)
5.10YoY -36%
3.88
7.92
PAT Margin (%)
5.7YoY -25%
4.6
7.6
The margin recovery is temporary
The profit bounce came from better operational control. Flash Finance reported the operating profit margin expanded 253 basis points sequentially to 16.1%. This follows a difficult June quarter where, according to the company's investor presentation, temporary labour problems had slashed the EBITDA margin.
Management has called those issues temporary. But the structural pressure remains. Newboard.in notes labour costs have risen about 150% over three years, far outpacing material inflation. While contracts have price variation clauses for steel and cement, passing on labour costs is harder.
A full order book meets empty cash flows
The company's future is secured by a strong order book, last reported at ₹846.9 crore after a ₹54.7 crore win from Weisdom Group in August. This provides visibility for the next 24-36 months.
Yet converting orders to cash remains a struggle. Flash Finance notes H1 FY27 operating cash flow was negative ₹11.8 crore, despite a ₹9.0 crore net profit. Borrowings have also risen 15% since March to ₹160 crore, funding working capital locked in projects.
The market is waiting for execution
The stock reaction has been muted, with MarketsMojo maintaining a 'Hold' rating. The stock is down 25% year-to-date, reflecting concerns over execution and margins. The company trades at a P/E of 15.8, a 39% discount to the industry average, pricing in these risks.
The quarter shows Chavda Infra can stabilise its operations. But lasting improvement requires converting its large order book into steady, profitable revenue while managing a strained balance sheet.
Key Points
Sequential profit grew 31% as operating margins recovered from a labour-cost induced slump in Q1.
Revenue declined 14% year-on-year, highlighting continued pressure from project phasing and cost challenges.
A strong ₹847 crore order book provides multi-year visibility, but negative operating cash flow and rising debt signal working capital stress.
The stock trades at a significant discount to the sector, reflecting execution and margin risks.
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Hexa Perspective
This quarter confirms Chavda Infra's business is cyclical and project-driven. The margin recovery is welcome but fragile, resting on the management's ability to control labour costs it has struggled to pass through.
The large order book is a clear strength, but its value hinges on execution at healthy margins. With cash flow deeply negative and borrowings rising, the company's ability to fund this growth without further straining its balance sheet is the critical watchpoint for the coming year.
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Frequently asked questions
What were Chavda Infra's Q2 FY27 results?
For Q2 FY27 (quarter ended September 2026), Chavda Infra reported revenue of ₹89.35 crore and a net profit of ₹5.10 crore. While profit rose 31% from the previous quarter, revenue declined 14% compared to the same quarter last year.
Why did Chavda Infra's Q2 FY27 revenue decline year-on-year?
Chavda Infra's revenue fell 14% year-on-year in Q2 FY27 due to the project-based nature of its billing. According to analysis by Newboard.in, revenue tends to be uneven as the company invoices clients only after each construction stage is completed and measured.
What drove Chavda Infra's 31% quarter-on-quarter profit growth in Q2 FY27?
The 31% sequential profit growth was driven by a recovery in operating margins. Flash Finance reported the operating profit margin expanded by 253 basis points to 16.1%, as the company addressed temporary labour problems that had squeezed margins in the June quarter.
Why did Chavda Infra's net profit margin contract year-on-year?
Chavda Infra's net profit margin fell 190 basis points year-on-year to 5.7% in Q2 FY27. This was primarily due to rising labour costs, which the company's FY25 annual report noted have increased about 150% over three years, pressuring profitability.
What is Chavda Infra's current order book?
As of August 2026, Chavda Infra's unexecuted order book stood at approximately ₹846.9 crore. This followed a ₹54.72 crore contract win from Weisdom Group, providing revenue visibility for the next 24 to 36 months according to company filings.
What was Chavda Infra's management commentary for FY27?
Management has not provided specific FY27 sales or profit guidance. However, it has stated the strong order book ensures revenue visibility and aims to double the business every four years. It also termed the labour issues that hurt Q1 margins as temporary.
What is Chavda Infra's cash flow situation?
Chavda Infra's cash flow from operations was negative ₹11.8 crore for the first half of FY27, as reported by Flash Finance. This was despite a net profit of ₹9.0 crore, indicating significant working capital is tied up in ongoing projects.
Did Chavda Infra's Q2 results beat analyst estimates?
Widely published analyst consensus estimates are not available. Flash Finance's analysis measures the company against its own trend, noting the quarter's performance relative to its historical growth path rather than external forecasts.
How did Chavda Infra's stock react to the Q2 results?
Market sentiment remains cautious. MarketsMojo rates the stock 'Hold'. The stock is down about 25% year-to-date, reflecting broader concerns over execution, margins, and the company's negative operating cash flow.
What are the major risks facing Chavda Infra?
Key risks include high and rising labour costs, reliance on the Gujarat real estate cycle, and significant working capital requirements that lead to negative cash flows despite reported profits. The company also has an outstanding tax demand under appeal.
Chavda Infra Q2 profit drop
Chavda Infra's net profit for Q2 FY27 (Sep 2026) was ₹5.10 crore. This represents a 35.6% drop compared to the profit of ₹7.92 crore reported in the same quarter last year (Q2 FY26), driven by lower revenue and sustained cost pressures.
Chavda Infra September quarter profit
For the September 2026 quarter (Q2 FY27), Chavda Infra reported a net profit of ₹5.10 crore. This was a 31.4% increase from the ₹3.88 crore profit in the June 2026 quarter, but a 35.6% decrease from the ₹7.92 crore profit in September 2025.
Why did Chavda Infra profits plunge despite higher sales?
This quarter's dynamic was different: Chavda Infra's profit actually rose 31% sequentially, but revenue was down 14% year-on-year. The annual profit decline is attributed to that lower revenue base and a 190-basis-point contraction in net profit margin due to elevated labour costs.
Chavda Infra order book 2026
As of August 2026, Chavda Infra's total unexecuted order book was approximately ₹846.92 crore. This provides strong revenue visibility for the next 24 to 36 months, as stated in the company's FY26 annual report and recent project announcements.
Chavda Infra Q2 FY27 results November 2026
Chavda Infra announced its Q2 FY27 results for the period ended September 2026 on 14 November 2026. The standalone results showed revenue of ₹89.35 crore and a net profit of ₹5.10 crore, with a net profit margin of 5.7%.
