NRB Bearings (NRBBEARING) Q2 FY27 Profit Slumps 23% as Costs Outpace Sales
The bearings maker's September quarter profit fell sharply year-on-year and sequentially, as revenue growth was overwhelmed by persistent cost pressures.
NRB Bearings reported a 23.3% year-on-year decline in Q2 FY27 net profit to ₹31.76 crore, even as revenue grew 5.2%. The net profit margin contracted by 340 basis points, reflecting a challenging cost environment.
For an auto ancillary firm, a quarter of modest sales growth should translate to stable profits. NRB Bearings' September quarter shows that equation breaking down, with costs rising faster than the top line.
The numbers tell a story of pressure. Revenue inched up 5.2% year-on-year to ₹342.01 crore, but net profit fell 23.3% to ₹31.76 crore. Sequentially, both revenue and profit declined by 7.4% and 15.9%, respectively.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 342.01YoY +5.2% | 369.53 | 325.20 |
| Profit (₹ Cr) | 31.76YoY -23% | 37.76 | 41.41 |
| Net Profit Margin (%) | 9.3YoY -27% | 10.2 | 12.7 |
Where the profit vanished
A 340-basis-point year-on-year margin squeeze points directly to costs. Total expenses rose 6.9%, outpacing revenue growth. A key driver was a 57.8% plunge in other income, which fell to ₹6.04 crore from ₹14.31 crore a year ago.
This sharp drop, as noted in the financial filings, removed a significant buffer that had supported profitability. Meanwhile, depreciation costs rose 18.3% year-on-year, reflecting ongoing capital asset utilization.
The cash flow conundrum
Even the modest sales growth came at a liquidity cost. A report from Scanx.trade highlighted that operating cash flow for the first half of FY27 turned deeply negative at ₹8.19 crore.
This reversal from a positive flow a year ago was due to a sharp rise in working capital. Inventories and trade receivables grew significantly, consuming cash despite the higher turnover.
A sector out of sync
This strain is notable against a robust sector backdrop. Rival SKF India raised its full-year revenue growth guidance to 20%, as reported by CNBC-TV18, citing strong demand across automotive segments.
NRB's performance suggests company-specific challenges in converting sector demand into clean earnings. The firm's net profit margin of 9.3% is now well below its trailing twelve-month average of 10.0%.
Key Points
- Net profit fell 23.3% year-on-year despite a 5.2% rise in revenue, highlighting severe margin pressure.
- A 57.8% collapse in other income compared to Q2 FY26 was a major contributor to the profit decline.
- Operating cash flow turned negative due to a significant build-up in inventory and receivables.
- The performance contrasts with strong demand commentary from larger peers in the auto ancillary space.
Hexa Perspective
This quarter underscores a profitability challenge that is structural, not cyclical. The margin contraction stems from both a high base of other income and rising operational costs, not merely a sales dip.
The negative cash flow from operations, driven by working capital, adds a layer of financial strain. Investors are weighing the company's capacity expansion plans against this immediate pressure on earnings quality.
The path to recovery hinges on restoring operating leverage. This requires not just sales growth matching the sector, but also disciplined cost management and working capital control in the coming quarters.
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