JTEKT India (JTEKTINDIA) Q2 FY27 Profit Slips 7% Despite 31% Revenue Surge in Q2
The auto parts maker posted robust top-line growth but saw net profit decline year-on-year as higher costs and interest expenses squeezed margins.
JTEKT India's Q2 FY27 revenue surged 31% year-on-year to ₹835 crore, driven by strong demand. However, net profit fell 7% to ₹17 crore as rising costs and a sharp increase in interest expense pressured profitability.
For an auto component supplier, strong revenue growth signals healthy demand from vehicle manufacturers. JTEKT India’s September quarter delivered exactly that, but the bottom line told a story of costs rising even faster.
The company reported revenue of ₹835 crore, a 31% jump from a year ago. Sequentially, revenue grew 16% from a weak June quarter. Profit, however, fell 7% year-on-year to ₹17 crore, though it rebounded sharply from the ₹6 crore low of the previous quarter.
Revenue & profit
Revenue (₹ Cr)
Net Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 (Sep '26) | PreviousQ1 FY27 (Jun '26) |
|---|---|---|
| Revenue (₹ Cr) | 835.0 | 718.0 |
| Net Profit (₹ Cr) | 17.0 | 6.2 |
| Net Profit Margin | 2.0% | 0.9% |
The squeeze behind the sales
Where did the profit go? Total expenses rose 32% year-on-year, nearly matching the revenue growth. A key pressure point was finance cost, which surged 216% to ₹6 crore. Reports from Arthneeti.com link this to higher borrowings for capacity expansion.
Depreciation also climbed 35%, consistent with commissioning new production lines. This, alongside rising employee and material costs, pushed the net profit margin down 90 basis points to 2%.
A recovery with a long runway
The sharp 173% quarter-on-quarter profit jump is more a recovery from an unusually weak base than a breakout. The June quarter's ₹6 crore profit was depressed by severe margin compression, as noted by Stockwatch.live.
Management at the Japanese parent, JTEKT Corporation, has raised its full-year revenue and business profit forecasts, according to Quartr. This suggests confidence in the demand environment, though the Indian subsidiary's margin path remains its own challenge.
Investing for a greener, bigger future
Concurrently with the results, the board approved a ₹2.4 crore investment in a captive solar power project, as per Arthneeti.com. This aligns with a strategic shift to secure energy and cut long-term operational costs.
More significantly, the company is expanding its Constant Velocity Joint (CVJ) line capacity by 0.8 million units in Gujarat. This 66% expansion, targeting completion by August 2028, is funded by internal accruals and debt to meet fast-growing OEM demand.
Key Points
- Revenue growth of 31% YoY reflects strong underlying demand from the automotive sector, but profitability did not keep pace.
- Net profit margin contracted due to a steep rise in finance costs and depreciation linked to recent capacity investments.
- The company is executing a dual strategy of capacity expansion for growth and investing in solar power for cost control.
- The quarterly profit recovery is pronounced but comes from a deeply depressed base in the prior quarter.
Hexa Perspective
The quarter underscores a classic growth-investment trade-off. JTEKT India is successfully riding a demand wave, but the capital spent to catch it is now flowing through the P&L as higher interest and depreciation.
The margin squeeze may persist until the new capacities are fully utilized and start generating operating leverage. Investors are left weighing robust top-line momentum against a profitability recovery that is still finding its footing, with the stock's 25% decline over the past year already pricing in some of these pressures.
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