India Gelatine (INDGELA) Q2 FY27 Profit Rises 12% Despite a Dip in Revenue
The gelatin maker's second-quarter profit rose year-on-year on lower costs, but a sequential decline and a build-up in receivables signal caution.
India Gelatine & Chemicals posted a 12.4% yearly profit rise to ₹7.24 crore in Q2 FY27, even as revenue fell 3.6%. The gain came from lower total expenses, but a sharp drop in other income and rising trade receivables raise questions about quality.
For a business that turns animal bone into gelatin, success is measured in the spread between raw material costs and final product prices. India Gelatine & Chemicals saw that spread widen this quarter, delivering a profit gain even as sales softened.
The numbers show a clear split. Revenue from operations was ₹45.2 crore, down 3.6% from a year ago. Profit after tax, however, rose 12.4% to ₹7.24 crore. The net profit margin expanded 230 basis points to 16%.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 (Sep 2026) | PreviousQ1 FY27 (Jun 2026) |
|---|---|---|
| Revenue (₹ Cr) | 45.2 | 45.68 |
| Profit (₹ Cr) | 7.24 | 8.08 |
| Net Profit Margin (%) | 16.0 | 17.7 |
Where the profit came from
A report from ScanX points to a sharp reduction in total expenses, which fell nearly 7% year-on-year. This more than offset the revenue decline and a 30% drop in other income. The profit growth was driven by core operational adjustments, not one-off gains.
Sequentially, the picture is less robust. Profit fell 10.4% from the June quarter, and the margin contracted 170 basis points. A key factor was a 47.5% quarter-on-quarter plunge in other income, which the ScanX report links to a significant working capital change.
A cash flow warning sign
That working capital shift is a notable pressure point. Trade receivables surged over 50% since March 2026, according to ScanX. This ₹631 lakh increase outpaced revenue changes, indicating extended credit or slower collections.
While cash balances improved and long-term debt was eliminated, net operating cash flow for the half-year fell sharply. The company is funding its growth, including a capacity expansion, but cash conversion has weakened.
The capacity question
Management is executing a phased expansion to raise gelatin capacity from 2,000 to 2,700 MT, as noted in an AGM summary from ScanX. This positions the firm to capture export demand, especially with reduced capacities in Europe.
The broader market outlook is firm. A ChemAnalyst report cited by LinkedIn notes global gelatin prices rose in Q2 2026, driven by freight costs and steady pharmaceutical demand. India's price increase was more modest at 1.6%.
Key Points
- Yearly profit grew 12.4% on lower expenses, expanding the net margin to 16%.
- Revenue declined 3.6% year-on-year and profit fell 10.4% sequentially from a strong Q1.
- Trade receivables jumped over 50% since March, pressuring operating cash flow.
- A capacity expansion from 2,000 to 2,700 MT is underway to target export markets.
Hexa Perspective
This quarter presents a classic efficiency story masking top-line softness. The yearly profit gain is credible, built on cost control rather than sales growth. The concern is sustainability.
The receivables build-up suggests the company may be stretching terms to maintain sales, which pressures cash generation. The coming quarters will test whether the new capacity can drive volume-led growth or if the business remains reliant on managing a narrowing cost spread.
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