National Plastic Industries (NATPLAS) Q2 FY27 Profit Dives 40% as Input Costs Soar
A sharp rise in material costs, which the company could not fully pass on, led to a steep profit drop despite a modest sales increase in the September quarter.
National Plastic Industries reported a 40% year-on-year drop in net profit for Q2 FY27, as a 28% surge in material costs severely compressed margins. Revenue grew only 1.9% over the same period.
For a manufacturer of plastic houseware, the quarter is a story of what happens between the price of resin and the price on the shelf. National Plastic Industries' September quarter shows that gap closing painfully, with profit falling 40% from a year ago even as sales inched up.
The numbers tell a clear story of pressure. Revenue was ₹23.19 crore, a modest 1.9% increase from last September. Profit, however, collapsed to ₹0.97 crore. The net profit margin shrank by 290 basis points to 4.2%.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
Metric
CurrentQ2 FY27 (Sep 2026)
PreviousQ1 FY27 (Jun 2026)
Revenue (₹ Cr)
23.19
15.52
Profit (₹ Cr)
0.97
0.62
Net Profit Margin
4.2%
4.0%
The 28% cost that ate the profit
The collapse in profitability had a single, clear driver. According to a report from ScanX, the cost of materials consumed surged 27.8% year-on-year. Revenue grew less than 2%, meaning the company could not pass on the full inflation to its customers.
This is a sector-wide challenge. Analysis from MarketsMojo notes that even larger peers like Astral faced sharp operating margin contraction this quarter due to rising input costs and competitive pricing. For National Plastic, the squeeze was acute.
A cash flow strain emerges
The margin pressure is now visible in the company's cash generation. For the half-year ended September, operating activities saw a net cash outflow of ₹14.07 crore, as reported by InvestyWise. This was driven by working capital changes, including inventory build-up.
To fund operations and capital expenditure, the company relied on borrowings. Non-current borrowings rose sharply to ₹16.22 crore at the end of September from ₹5.80 crore at the end of March, per ScanX.
How long does the squeeze last?
The outlook hinges on resin prices and pricing power. Sector analysis from Multibagg.ai flags polymer-price volatility as a principal structural risk for consumer plastic product makers. With competition intense from regional suppliers, the ability to recover costs remains limited.
Management did not provide explicit forward guidance in the reviewed filings, according to StockFin.ai. The path to recovery requires either a sustained drop in raw material costs or a successful shift in product mix that allows for better pricing.
Key Points
Net profit fell 40.1% year-on-year to ₹0.97 crore on a modest 1.9% revenue increase.
The profit margin contracted by 290 basis points, driven by a 27.8% surge in material costs that outpaced sales growth.
Operating cash flow was negative for the half-year, with the company increasing long-term borrowings to fund working capital and capital expenditure.
The company trades at a significant discount to the industry average, with a P/E of 10.2 against a sector P/E of 37.4.
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Hexa Perspective
This quarter underscores a fragile business model in a volatile input cost environment. The 28% jump in material costs is not a blip but a severe compression that halved profitability. With operating cash flow deeply negative and reliant on debt, the balance sheet is now funding the margin squeeze.
The valuation gap to the industry reflects these risks. For the discount to narrow, National Plastic needs to demonstrate it can either consistently pass on costs or that resin inflation is decisively retreating. Until then, profits will remain hostage to the price of plastic.
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Frequently asked questions
What were National Plastic Industries' Q2 FY27 results?
For the quarter ended September 2026, National Plastic Industries reported revenue of ₹23.19 crore and a net profit of ₹0.97 crore. This represented a modest 1.9% year-on-year revenue growth but a sharp 40.1% decline in profit compared to the same quarter last year.
Why did National Plastic Industries' Q2 FY27 profit drop 40%?
National Plastic Industries' Q2 FY27 profit fell 40% primarily due to a severe spike in input costs. A ScanX report notes the cost of materials consumed jumped 27.8% year-on-year, which the company could not fully pass on to customers through price increases, crushing its profit margin.
What was National Plastic Industries' net profit margin in Q2 FY27?
National Plastic Industries' net profit margin was 4.2% for the September 2026 quarter. This marks a significant contraction of 290 basis points from the 7.1% margin it reported in the same quarter a year ago (Q2 FY26).
Did National Plastic Industries' revenue grow in Q2 FY27?
Yes, National Plastic Industries' revenue grew, but only marginally. Revenue for Q2 FY27 (September 2026) was ₹23.19 crore, a 1.9% increase from the ₹22.76 crore reported in Q2 FY26. However, this small gain was overshadowed by much faster cost growth.
What caused the margin squeeze for National Plastic Industries in Q2 FY27?
The margin squeeze was caused by input cost inflation. According to ScanX, the cost of materials consumed rose 27.8% year-on-year, far outpacing the 1.9% revenue growth. This indicates the company faced significant polymer/resin cost inflation it could not pass on to customers.
What was National Plastic Industries' cash flow from operations in Q2 FY27?
National Plastic Industries reported a net cash outflow from operating activities of ₹14.07 crore for the half-year ended September 2026, as per InvestyWise. This negative cash flow was primarily due to working capital changes, including an increase in inventories.
Has National Plastic Industries provided any guidance for FY27?
No explicit forward guidance or strategic outlook was provided by management in the reviewed filings for the Q2 FY27 results, according to an analysis by StockFin.ai. The company's commentary focused on the approval of the quarterly financial statements.
Are institutional investors buying National Plastic Industries stock?
Institutional investor holdings in National Plastic Industries remain negligible. A StockFin.ai analysis of the shareholding pattern shows both Foreign Institutional Investor (FII) and Domestic Institutional Investor (DII) holdings were at 0.0% as of the latest reported quarter (Q1 FY27).
How did National Plastic Industries stock price react to the Q2 FY27 results?
Specific intraday reaction data for November 14, 2026, is not available in the research. However, the stock has significantly underperformed over the past year, with a one-year return of -31.4% as of November 6, 2026, reflecting broader concerns about the company's performance.
What is the demand outlook for plastic products in India?
Sector analysis from Multibagg.ai indicates demand for affordable plastic household products is supported by urbanisation and retail expansion. However, the sector faces intense competition, polymer-price volatility, and regulatory pressures, which create a challenging environment for margin recovery.
National Plastic Industries Q2 profit drop
National Plastic Industries reported a Q2 FY27 (September 2026) net profit of ₹0.97 crore, a drop of 40.1% from the ₹1.62 crore profit in Q2 FY26. The decline was driven by a 27.8% surge in material costs that severely compressed profit margins.
National Plastic Industries Q2 FY27 results
National Plastic Industries announced its Q2 FY27 results for the period ended September 2026. The company posted revenue of ₹23.19 crore and a net profit of ₹0.97 crore. Profit fell 40.1% year-on-year due to a severe increase in input costs that outpaced sales growth.
