Permanent Magnets (PERMAGN) Q2 FY27 Profit Triples on Strong Revenue and Margin Expansion
The magnet maker's Q2 profit surged 217% year-on-year, driven by a 48% revenue jump and a sharp 560 bps improvement in net profit margin.
Permanent Magnets delivered a powerful quarter with profit tripling year-on-year. The surge was fueled by strong revenue growth and a significant expansion in profitability, putting the company on track to meet its full-year guidance.
Permanent Magnets' transition into higher-margin specialty products is starting to pay off. The company delivered a quarter where strong top-line growth was amplified by a powerful surge in profitability, more than tripling its net profit from a year ago.
The numbers show a company hitting its stride. Revenue for the September quarter rose 47.5% year-on-year to ₹72.46 crore. More importantly, net profit jumped 216.9% to ₹7.51 crore. This was not just a function of higher sales; the net profit margin expanded by a substantial 560 basis points to 10.4%.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Period | Sep 2026 | Jun 2026 | Sep 2025 |
| Revenue (₹ Cr) | 72.46YoY +47% | 63.23 | 49.13 |
| Profit (₹ Cr) | 7.51YoY +217% | 3.80 | 2.37 |
| Net Profit Margin (%) | 10.4YoY +117% | 6.0 | 4.8 |
The sequential story is just as compelling. Profit nearly doubled from the June quarter on a 14.6% rise in revenue, highlighting a dramatic improvement in earnings quality. According to a report by news.alfafinder.com, operating margins widened sharply to 16.7% from 7.3% a year ago, driving the profit surge.
Why Margins Expanded Sharply
The margin expansion stems from a strategic shift. Management is pivoting from traditional capital goods to high-margin segments like specialized alloys and latching relays. A report from StockFin.ai notes that the new Alloys furnace, commissioned in January 2026, was running at 80-90% utilization by the end of last fiscal year. This scale-up in higher-value products, coupled with effective cost management, allowed profitability to outpace sales growth significantly.
The Growth Engine for the Coming Year
The company's guidance suggests this is not a one-off. Management has reiterated its FY27 revenue growth target of 20-30% with EBITDA margins between 15-18%, as noted by news.alfafinder.com. Two key projects are set to contribute. The Relays division, though delayed, is now expected to see commercial ramp-up in the second half of this year. More immediately, a ₹40-50 crore capex at the Quantum Magnetics subsidiary is on track for commissioning in Q3 FY27, with first commercial sales expected the following quarter.
The Cash and Valuation Question
While profits are soaring, the investment cycle is intense. The company's free cash flow margin was negative 7.63% for FY26, according to data from Inve.money, as it funds these expansions. This is reflected in a valuation that prices in future growth; the stock trades at a P/E of 36.2, which is actually at a 14% discount to the industry average of 42.2. Institutional ownership remains negligible, suggesting the market is still evaluating the execution of this long-term transition.
Key Points
- Consolidated net profit surged 216.9% year-on-year to ₹7.51 crore in Q2 FY27.
- Revenue growth of 47.5% was amplified by a 560 bps expansion in net profit margin to 10.4%.
- Management reiterated FY27 guidance of 20-30% revenue growth and 15-18% EBITDA margins.
- Key growth projects in Relays and Quantum Magnetics are slated for commercialization in H2 FY27.
- The stock trades at a P/E of 36.2, a discount to the industry, amid heavy ongoing capital expenditure.
Hexa Perspective
The quarter validates the thesis that Permanent Magnets' shift up the value chain can materially boost earnings. The margin leap from the 3-6% range of the past year to over 10% is the most important signal, showing operating leverage from its new Alloys capacity.
The next two quarters are critical. The story now depends on the successful commissioning of the Quantum Magnetics phase and the delayed commercial launch of Relays. If these milestones are hit, the current growth trajectory has room to sustain. The risk is that the high capex continues to pressure cash flows before these new lines can generate meaningful revenue, testing investor patience during the build-out phase.
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