Crest Ventures (CREST) Q2 FY27 Profit Slips Despite a 26% Revenue Jump
The diversified NBFC saw a sharp sequential drop in profitability as rising expenses and real estate losses offset strong growth in its financial services segment.
Crest Ventures posted a 26% yearly revenue rise but an 18% quarterly profit drop. The decline was driven by a sharp margin squeeze from rising costs and ongoing losses in its real estate business.
For Crest Ventures, the September quarter was a story of two diverging engines. The financial services arm accelerated, but the real estate business continued to burn cash, leaving the bottom line weaker than the top line suggested.
Revenue for Q2 FY27 rose 26% year-on-year to ₹37.29 crore, while profit more than doubled from a low base to ₹9.37 crore. Yet, profit fell 18% from the previous quarter despite a 23% rise in sales. The net profit margin compressed sharply to 25.1% from 37.9% in Q1 FY27.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 37.29YoY +26% | 30.24 | 29.54 |
| Profit (₹ Cr) | 9.37YoY +151% | 11.47 | 3.73 |
| Net Profit Margin (%) | 25.1YoY +99% | 37.9 | 12.6 |
The cost surge that ate the profit
The margin squeeze was not from weak sales. According to a MarketsMojo report, employee costs rose over 15% and total expenses jumped 21% from the June quarter. Depreciation also surged 45% year-on-year, indicating an expanding asset base.
This cost inflation outpaced revenue growth, eroding profitability. The same report notes the company's financial trend was classified as "FLAT" for the quarter, a downgrade from the "OUTSTANDING" rating a year ago.
A business split in two
The divergence is clear in segment data. The Investing & Credit Activities segment was the primary driver, delivering a robust result. In contrast, the Real Estate segment recorded a loss of over ₹5 crore, as reported by scanx.trade.
Management, via the AGM, highlighted progress in new projects like Crest Golfshire and Crest Saidale. However, contributions from these are years away, while current projects continue to weigh.
A valuation disconnect
The market's initial 5% pop on results, noted by MarketsMojo, contrasts with a skeptical analyst view. The firm carries a "SELL" rating with a score of 41/100, citing a "VERY EXPENSIVE" valuation grade at 32x trailing earnings.
This premium exists despite an "AVERAGE" quality rating and the sequential profit decline. The stock remains nearly 13% below its yearly high, reflecting the underlying tension.
Key Points
- Consolidated profit fell 18% quarter-on-quarter to ₹9.37 crore despite a 23% rise in revenue, highlighting significant margin pressure.
- Rising employee costs, depreciation, and other expenses outpaced sales growth, compressing the net profit margin by 1280 basis points from Q1.
- The real estate segment remained a drag, posting a loss, while the financial services and investing arm drove top-line growth.
- The stock trades at a premium valuation despite a flat financial trend and analyst concerns over execution sustainability.
Hexa Perspective
Crest Ventures' quarter reveals the inherent volatility of its dual-model strategy. The financial services engine is humming, but the real estate division's losses are a persistent, costly counterweight.
The sharp margin compression suggests operating leverage is not yet in play. For the narrative to turn, the company needs either a dramatic reduction in the real estate drag or a surge in financial services profitability large enough to cover it. Until one of those occurs, the quarterly numbers may continue to swing between these two opposing forces.
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