Clear Secured Services (CSSL) Q2 FY27 Profit Plunges 62% as Revenue Drops and Employee Costs Soar
Clear Secured Services saw its Q2 FY27 revenue fall 30% year-on-year, with profit down 62% as employee costs nearly doubled, squeezing margins.
Clear Secured Services reported a sharp 62% drop in Q2 FY27 profit to ₹6.4 crore. Revenue fell 30% to ₹220.5 crore, while employee costs surged 98.5%, severely pressuring the company's net profit margin.
For a business built on long-term contracts, Clear Secured Services' September quarter showed a jarring disconnect. Revenue fell sharply, but costs did not follow, leaving profit margins under severe pressure.
The numbers tell a story of contraction. Standalone revenue fell 30% from a year ago to ₹220.5 crore. Profit after tax plunged 62% to ₹6.4 crore. Sequentially, the drop was even steeper, with revenue and profit both down more than 50% from the March quarter.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 (Sep '26) | PreviousQ4 FY26 (Mar '26) |
|---|---|---|
| Revenue (₹ Cr) | 220.47 | 462.63 |
| Profit (₹ Cr) | 6.40 | 13.32 |
| Net Profit Margin | 2.9% | 2.9% |
The Cost That Won't Bend
While revenue fell, employee costs nearly doubled year-on-year, rising 98.5% to ₹122.5 crore. This surge is the primary driver behind the 250-basis-point collapse in net profit margin. The company has not provided a detailed explanation, but the scale of the increase suggests a structural shift in its cost base, possibly linked to new labour regulations.
According to a Crisil Ratings report cited by The Economic Times, India's security and facility management sector is facing a more demanding operating environment. Labour reforms are tightening compliance, which can increase working capital needs and reduce flexibility in wage payments.
A Shrinking Order Pipeline
The revenue decline points to a potential slowdown in order execution or a shrinking backlog. Research from arthneeti.com indicates the company's government order book stood at ₹142 crore as of March 2026, down from ₹226 crore in December 2025. This provides forward visibility but at a lower level than before.
Management did not hold an earnings call for this quarter, so formal guidance is absent. The company's investor presentation, however, emphasizes long-term government contracts and a balanced revenue mix for resilience.
Key Points
- Standalone profit fell 62% year-on-year to ₹6.4 crore on a 30% drop in revenue to ₹220.5 crore.
- Employee costs surged 98.5%, driving a 250-basis-point compression in net profit margin to 2.9%.
- The government order book reportedly shrank from ₹226 crore in December 2025 to ₹142 crore in March 2026.
- The company trades at a significant discount to the industry, with a P/E of 5.5 against a sector average of 34.3.
Hexa Perspective
The quarter reveals a business caught between falling income and rigid costs. The near-doubling of employee expense is not a one-quarter anomaly but a fundamental reset of the cost structure, likely tied to regulatory changes the Crisil report highlighted.
Profitability recovery hinges on two uncertain levers: winning and executing new contracts to grow the top line, and achieving operational efficiencies to offset the higher fixed cost base. The lack of management commentary adds to the uncertainty, leaving investors to weigh the sector's structural growth against this company's specific execution challenges.
Also read
Want this applied to your portfolio?
Talk to a HexaWealth advisor, or sync your mutual fund data for insights tailored to your holdings.
