Ester Industries (ESTER) Q2 FY27 Profit Drops 58% as Specialty Polymers Segment Slumps
A 25% revenue surge was offset by a sharp decline in the engineering plastics division and thinner core margins, halving quarterly profit.
Ester Industries' Q2 FY27 saw revenue rise 25% year-on-year to ₹444 crore, but net profit fell 58% sequentially to ₹7.8 crore. The drop was driven by a steep decline in the specialty polymers segment and a contraction in net profit margin.
For Ester Industries, the September quarter was a story of two diverging businesses. While robust demand for polyester films powered a 25% revenue jump, a sharp slump in its specialty polymers division and thinner margins cut net profit by more than half from the previous quarter.
The numbers show a clear split. Consolidated revenue reached ₹443.8 crore, up 25.3% from a year ago. Net profit, however, fell 57.9% sequentially to ₹7.8 crore, pulling the net profit margin down to 1.8% from 4.3% in Q1.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 443.8YoY +25% | 432.2 | 354.2 |
| Profit (₹ Cr) | 7.8YoY +149% | 18.6 | -15.8 |
| Net Margin (%) | 1.8YoY +140% | 4.3 | -4.5 |
Why the profit shrank
The profit drop stemmed from a collapse in one division. According to a report from StockWatch, the specialty polymers segment saw revenue plunge 49% year-on-year, with profit falling 53%. This directly contradicted management's earlier guidance for flat-to-single-digit growth this fiscal year.
Meanwhile, the core polyester films segment swung to a profit, driving the overall year-on-year turnaround. Yet, the quality of that profit was diluted. Flash Finance noted that 46% of pre-tax profit came from other income and one-off items, highlighting thin core operating margins.
The outlook and market read
Management has scheduled an earnings call but has not issued new numeric guidance. The company's broader target remains ₹2,000-2,200 crore revenue over 2-3 years. A key near-term test is whether specialty polymers stabilises after this quarter's severe miss.
Debt is another focus. Consolidated borrowings rose by nearly ₹20 crore in the first half, according to StockWatch, moving opposite to a stated full-year repayment target of ₹100 crore. This adds pressure on cash flows as the company funds its joint venture for recycled PET, now targeted for 2029.
Key Points
- Consolidated net profit fell 58% quarter-on-quarter to ₹7.8 crore despite a 25% year-on-year revenue increase.
- The steep decline was led by a 49% year-on-year revenue crash in the specialty polymers segment, missing management's growth guidance.
- Nearly half of the pre-tax profit came from other income and one-off items, indicating core operating margins remain under pressure.
- Borrowings increased in the first half, running counter to the company's full-year debt repayment target.
Hexa Perspective
The quarter reveals a business reliant on one strong segment to carry a struggling one. The polyester film division's recovery is real, supported by firm global pricing. However, the severity of the specialty polymers slump raises questions about its near-term recovery and margin profile. Investors are left weighing a promising long-term circular-economy project against immediate execution challenges in a core division and a still-leveraged balance sheet. The sustainability of the current profit level hinges on a swift turnaround in polymers and disciplined debt management in the second half.
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